2 year fixed rate mortgage 1.37% (£1,995 fee; up to 60% LTV) good for mortgages > £305K at Post Office
-51°Expired

2 year fixed rate mortgage 1.37% (£1,995 fee; up to 60% LTV) good for mortgages > £305K at Post Office

6
Found 20th Jan 2015
The post office is offering a 2 year fixed-rate mortgage at 1.37%, with a £1,995 fee. This for mortgages up to 60% LTV.

By contrast, Yorkshire Building Society is offering one at 1.64% with a £345 fee.

That's a difference of 0.27% a year in interest for 2 years, and £1,650 in fees, which means anyone with a mortgage over about £305,555 should end up better off on the Post Office deal than on the YBS deal.

Example savings (see first comment below)
£510 for somebody with a £400,000 mortgage
£1,050 for somebody with a £500,000 mortgage

6 Comments

Original Poster

Here's a worked example, for somebody with a £400,000 mortgage (the numbers are approximate as they don't take into account the change in the size of the mortgage in the 2nd year following the repayment in the first year, but they're "close enough")

Post Office
£400,000 * 1.37% = £5,480 in interest
2 years = £10,960 in interest
Fee = £1,995
Total (interest + fee) = £12,955

Yorkshire Building Society
£400,000 * 1.64% = £6,560 in interest
2 years = £13,120 in interest
Fee = £345
Total (interest + fee) = £13,465 (+ £510 vs post office)

Or for £500,000 mortgage

Post Office
£500,000 * 1.37% = £6,850 in interest
2 years = £13,700 in interest
Fee = £1,995
Total (interest + fee) = £15,695

Yorkshire Building Society
£500,000 * 1.64% = £8,200 in interest
2 years = £16,400 in interest
Fee = £345
Total (interest + fee) = £16,745 (+ £1,050 vs post office)
Edited by: "Genki" 20th Jan 2015

Original Poster

Is there a cheaper deal out there? I'm not sure why this is going cold - is it just because it only benefits those people with very big mortgages?

Banned

Genki

Is there a cheaper deal out there? I'm not sure why this is going cold - … Is there a cheaper deal out there? I'm not sure why this is going cold - is it just because it only benefits those people with very big mortgages?



Yes.

Most normal folk don't have mortgages that big.

Those that do are rich and don't need deals.

Huge fee makes it not a good deal for most people, also I've found Post Office to be very sniffy about who they give the mortgage to as well, I'd have thought almost nobody could benefit from the deal. But the Yorkshire one is loads better.

lolyehright

Yes. Most normal folk don't have mortgages that big. Those that do are … Yes. Most normal folk don't have mortgages that big. Those that do are rich and don't need deals.



I would not consider that rich, just very wealthy. I do agree that this is only suitable for a small subset of people.

For a £400,000 mortgage with 60% LTV, that means that your deposit will be over £265K therefore the house is worth over £666K! Therefore this won't apply to many outside London & Home Counties. I guess this might be good for a remortage option

Obviously you would need a big enough salary to get accepted as well!

It is a great rate though, but the problem with 2-year deals is that things can change in those 2 years and you don't get the benefit of the low rate for long enough. Also, there is always a risk that remortgaging may be more difficult (say you have a drop in income, or new outgoings)

The nationwiide deal is probably the best one for the average Joe.

I went for a lifetime tracker because the fixed deals (at the time) weren't long enough to gain a good advantage and I can overpay or get out if the base rate gets too high but if it stays low, which looks likely for the next 2 years I won't have big booking fees or more paperwork hassle to deal with.
Edited by: "RedmanDealer" 20th Jan 2015

lolyehright

Yes. Most normal folk don't have mortgages that big. Those that do are … Yes. Most normal folk don't have mortgages that big. Those that do are rich and don't need deals.



Oh dear.
Post a comment
Avatar
@
    Text