First-time buyers and home movers have been offered the two cheapest mortgages of their type on the market
The post office has launched two of the cheapest mortgage products on the market.
The first is a rates off 1.33 per cent two-year fix for borrowers with a 25 per cent deposit or equity stake. It comes with a £1,995 fee.
Charlotte Nelson from Moneyfacts.co.uk said: ‘Yet again, Post Office Money has launched highly competitive mortgage deals.
‘The 1.33 per cent two-year fixed rate deal enters the market as lowest deal in its sector. As a result, this is a great choice for any borrower with the required 25 per cent deposit who is looking to minimise their monthly repayments. However, with a large fee of £1,995 any borrowers looking to minimise upfront cost would be wise to shop around.’
The first-time-buyer friendly product for borrowers with a 10 per cent deposit is a five-year fixed rate at 2.94 per cent. While it comes with a £995 fee, it includes a free valuation and £300 cash back on completion of the mortgage.
For a £150,000 loan over a 25-year mortgage term, it would cost the borrower £706.64 a month and £43,393.68 over the five years (including the fee). Over the full 25-year term, it costs £212,988.
Nelson said: ‘Borrowers with a 10 per cent deposit will be delighted by this latest launch from Post Office Money. Priced at 2.94 per cent fixed for five years is highly competitive and heads straight to the top of the market as a result. With the added bonuses of a reasonable fee of £995 and great incentive package, including £300 cash rebate, this is likely to be cost effective for borrowers looking for a recognised brand.’
For borrowers with a smaller deposit, the current best buy for those who can only put down 5 per cent of the purchase price is a two-year fix from Hanley Economic Building Society at 3.65 per cent with a fee of just £250.