5 Year Fixed Mortgage @ 2.74% (+£995 fee) @ The Post Office
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5 Year Fixed Mortgage @ 2.74% (+£995 fee) @ The Post Office

109
Found 1st Feb 2013
I recently signed up to the co-op 2.79% deal which was fixed for 5 years but just got wind of this which is even cheaper (by 0.05% I know). It's supported by the Bank of Ireland and requires a LTV of 60% or less.

Thought this may be helpful for some who need a mortgage and/or were rejected by Co-Op. Bear in mind, this is not a building society and you are still subject to other charges like Conveyencing etc...

Hope it helps and best of luck!

PS - just to put this into perspective, the tracker deals are 2.38% for life of mortgage (so vary when the Bank of England rate goes up or down from its present value of 0.5%). There is always a higher charge for fixing the payments as the risk of interest rates moving is passed onto the bank...

109 Comments

3.9% averaged over 5 years+ £995 up front.........not hard to beat!
Edited by: "antenna" 1st Feb 2013

Original Poster

General Lending Criteria

We’ll take the following factors into account when you apply for a mortgage with us.

Standard mortgages
Minimum loan: £25,001
Maximum loan: £1 million.
Loan types: For property purchase and remortgage only

Payment types: Repayment, interest only or a combination of both. There’s a maximum 75% loan to value on interest only or combination of repayment and interest only with a suitable repayment plan. If your loan exceeds 75% loan to value then the entire amount must be on a repayment basis.
Loan tiers: 90% up to £500,000, 85% up to £750,000, 80% up to £850,000, 75% up to £1m. Fees may be added. Conditions apply.
Property:
We do not accept:

Loans over 80% LTVThis stands for Loan to Value. It’s the amount of mortgage expressed as a percentage of the value of the property or purchase price, whichever is lower. For example, a mortgage of £80,000 on a purchase price of £100,000 would be 80% LTV. If the valuation of the property is lower than the price you've agreed, the LTV will be based on the valuation. for houses or loans over 75% LTVThis stands for Loan to Value. It’s the amount of mortgage expressed as a percentage of the value of the property or purchase price, whichever is lower. For example, a mortgage of £80,000 on a purchase price of £100,000 would be 80% LTV. If the valuation of the property is lower than the price you've agreed, the LTV will be based on the valuation. for flats and maisonettes for properties that are newly constructed (built or converted within the last 12 months), being purchased for the first time since completion or conversion, or subject to first registration of a lease
Studio flats or freehold flats
Ex-local authority flats that are located in a block more that 4 storeys high or that have open decking
Flats converted from office buildings or refurbished ex-local authority blocks
Mixed user buildings with mixed residential and commercial use where the LTVThis stands for Loan to Value. It’s the amount of mortgage expressed as a percentage of the value of the property or purchase price, whichever is lower. For example, a mortgage of £80,000 on a purchase price of £100,000 would be 80% LTV. If the valuation of the property is lower than the price you've agreed, the LTV will be based on the valuation. exceeds 75%
Leasehold terms of less than 70 years at the start of the mortgage (99 years in N. Ireland)
Leasehold terms of less than 45 years at the end of the term (74 years in N. Ireland)
Properties being purchased under a Right-to-Buy, shared ownership, or shared equity arrangement
Properties which include commercial usage
Properties with occupancy restrictions
Remortgages where you have owned the property for less than 12 months
Properties being acquired under an assignable contract
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Houses divided into two separate flats
This list is not exhaustive. Some non traditional forms of construction won’t be accepted. Please let us know if the property is built from anything other than brick or stone, if the roof is not tile or slate, or if it's a self-built property.

We may be able to lend if the property you are purchasing or remortgaging has solar panels but we may have specific lending requirements so check with us to see if you meet our criteria before you apply.
Age: Minimum: 18
Term: Maximum: 35 years (when calculating maximum borrowing we will only include the income of applicants who will be no older than 70 at the end of the mortgage term). Minimum: 10 years (shorter terms considered by exception provided we’re satisfied that ability to pay exists).
Overpayments:
You can overpay at any time during your mortgage term.

If you’re in a promotional period, you can overpay a minimum of £500 and a maximum of 10% of the outstanding mortgage balance (as at 31st March the previous year) without incurring any early repayment or administration charges.

Once the promotional period is over, the amount you can overpay is unlimited, however if you pay off your mortgage in full charges may apply.
You can either reduce your monthly repayments or reduce your mortgage term but remember, you can only reduce your mortgage term after the promotional period ends. There’s a £60 admin fee for this.
Income multiples: We calculate this based on 4.25 x income for single and joint applications. A minimum household income of £20,000 applies (for single or joint applications). Please note we’ll review your application to ensure we are satisfied with your ability to pay.
Employment status: We’ll consider your application if you’re employed or self employed (3 years minimum trading and the last 3 years accounts required).
Refinance:
You can remortgage to raise additional capital as long as:

additional funds will not be used for business or speculative purposes
an underwriter assessment approves it, if it’s for debt consolidation
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Edited by: "skgwho" 1st Feb 2013

Original Poster

antenna

3.9% averaged over 5 years.



Think it's 3.9% over the life of a loan. The average over 5 years (taking into account the cost of the mortgage of £995 would be dependent on the amount borrowed.

But the fixed rate only lasts 5 years........so you are in the hands of the gods regarding future rates.
Halifax,First Direct and HSBC all beat this rate (3.9 apr) and NO FEE upfront.
Edited by: "antenna" 1st Feb 2013

Original Poster

antenna

But the fixed rate only lasts 5 years........so you are in the hands of … But the fixed rate only lasts 5 years........so you are in the hands of the gods regarding future rates.Halifax,First Direct and HSBC all beat this rate (3.9 apr) and NO FEE upfront.



On a mortgage of £100,000 you will be paying an additional £1,160 in Year 1, offsetting the higher cost of the fee. Interest for first 5 years is 2.74% whereas others which are fee free are 3.9% per your calc!

moneysavingexpert.com/mor…tes - pretty good calculator on here if you want to look at it further.

The fee can be added onto the mortgage. After 5 years, you'd be subject to interest rate movements on the fixed, as well as the tracker. You can fix it for the first five atleast.

Antenna, if you remortgage after 5years, you can ignore the rate the mortgage changes to after the 5 year period. That is what most people do I think.

profet

Antenna, if you remortgage after 5years, you can ignore the rate the … Antenna, if you remortgage after 5years, you can ignore the rate the mortgage changes to after the 5 year period. That is what most people do I think.


Of course......but cheaper deals are out there today.......so why pay more for the next 5 years?.....

When my fixed deals run out i always fix into another one. Well... i used to until my last deal ran out 2 years ago and i went on SVR of 2.5 % . Its a shame i'll have fix in again as i need to remortgage for funds. Will go for another 2 year deal and hope the Standard base rate is still low when it runs out.

Santander are currently offering 2.24% for 2 year fix.

The 2.74% is only a "notional rate"........nobody will pay this rate when you take into account the £995 upfront fee....and even if you "add" the fee to your mortgage loan it will not save you anything but will cost you more in interest and capital repayments..
This mortgage will truly cost an apr over the five years of between 3.9% and 4.10%.......the three other companies i suggested will cost you between 3.6% and 3.8% over five years.
Edited by: "antenna" 1st Feb 2013

Original Poster

meandmy2kids

Santander are currently offering 2.24% for 2 year fix.



Booking fee = £1,995

Original Poster

antenna

The 2.74% is only a "notional rate"........nobody will pay this rate when … The 2.74% is only a "notional rate"........nobody will pay this rate when you take into account the £995 upfront fee....and even if you "add" the fee to your mortgage loan it will not save you anything but was cost you more in interest and repayments..This mortgage will truly cost an apr over the five years of between 3.9% and 4.10%.......the three other companies i suggested will cost you between 3.6% and 3.8% over five years.



The APR of 3.9% is the rate were the mortgage to be repaid over the life of the loan (with the remaining period charged at 4.49% variable). The rate is 2.74% interest on the O/S balance (with or without the fee) for the 5 years!

The only "true" way of comparing is to search out "Fee Free" mortgages.
But this is not to say they are the cheapest...........banks and building societies can and do bamboozle you with lies,damm lies and statistics...........only the apr over a fixed period can be trusted.

There's a word "Variable" so how can you project the interest rate over the life of the mortgage.
The way i read the 5 year 2.74% interest rate including the £995 upfront fee will cost a 5 year apr of 3.9%.....its the apr over five years that tells you everything you need to know

Take the monthly cost of the mortgage at 2.74% over 5 years and add £995 divided by 60 add a sixtieth to the monthly repayment over five years (if only you could pay the fee like this without paying even more interest on the fee itself)...........the true cost of five years payments.........so whats the apr.........not 2.74%

Edited by: "antenna" 1st Feb 2013

Oh dear, some folk on here shouldnt have mortgages reading some of these pathetic comments.

I will lend to you £1000 over 1 year at NO interest payable at all........only a £200 fee.........so whats the interest rate.....0% .....
Edited by: "antenna" 1st Feb 2013

Original Poster

antenna

There's a word "Variable" so how can you project the interest rate over … There's a word "Variable" so how can you project the interest rate over the life of the mortgage.The way i read the 5 year 2.74% interest rate including the £995 upfront fee will cost a 5 year apr of 3.9%.....its the apr over five years that tells you everything you need to know



Sorry, you have me totally confused. But I will try one more explanation:
Take two mortgages of £100,000 with an Interest Only factor (repayments skew results slightly and make it harder to explain). I will compare over a 5 year period

1) Initial fee of £995 which is fixed for 5 years at 2.74%. The initial cost + total interest payable in 5 year period is £ 14,695. This equates to an interest rate of 2.94% per Annum over the 5 year period.
2) Initial fee of £0 which is fixed for 5 years at 3.9%. The initial cost + total interest payable in 5 year period is 19,500. This equates to an interest rate of 3.90% per Annum over the 5 year period.

You can check the figures for yourself on moneysavingexpert.com/mor…tes.

They forecast the "variable" rate within the APR to remain what it is but then put warnings in saying the rate may fluctuate up as well as down. Feel free to check!

Just one question,why does the post office website quote 3.9% apr by comparison if you only pay 2.94% apr by comparison..............?

Original Poster

antenna

Just one question,why does the post office website quote 3.9% apr by … Just one question,why does the post office website quote 3.9% apr by comparison if you only pay 2.94% apr by comparison..............?



The 3.9% is based on repayment of the loan over the specified term (which they take to be somewhere between 20-30 years), and at their current standard variable rate, currently 4.49%. So first 5 years at 2.74%, the remaining period at 4.49%. Averaging out at 3.9% or thereabouts, taking into account of all applicable costs e.g. £995.

skgwho

The 3.9% is based on repayment of the loan over the specified term (which … The 3.9% is based on repayment of the loan over the specified term (which they take to be somewhere between 20-30 years), and at their current standard variable rate, currently 4.49%. So first 5 years at 2.74%, the remaining period at 4.49%. Averaging out at 3.9% or thereabouts, taking into account of all applicable costs e.g. £995.


Spot on.
Mr Antenna, I think you may be confusing people needlessly.

Thanks for your replies,so it seems if you only keep this mortgage for 5 years then you could be quids in. .

Original Poster

antenna

Thanks for your replies,so it seems if you only keep this mortgage for 5 … Thanks for your replies,so it seems if you only keep this mortgage for 5 years then you could be quids in. .



NP! If you intend to keep the mortgage for 5 years and the interest rates go up, you are quids in. If they remain the same, you have lost out to a tracker deal offering it at an interest + base rate of below 2.74%... But price in risk and you have a winner

It's a fantastic deal IMO.
Sorry Antena but I think you're confusing a lot of people here. The APR is really used mainly when comparing Personal loans as these loans are for a specific and predefined period of time, (and you are not allowed to change lenders), unlike a mortgage such as this which allows you to move away to another lender after the fixed rate period is over.

antenna, you are completely right that the arrangement fee effectively adds to the interest rate - though over 5 years its a fairly small increase. The rate that they quote as well as the 5 year fixed rate is, as others have said, the average rate you would pay if you kept the mortgage for the whole term.

2.59% fixed for 4 years and £999 fee if you a Nationwide Flexaccount customer.

we have been at the hands of the interest rates for the last 3yrs and im staying that way for the moment, i dont see it chnging just yet

60% ltv. Just lol.

Banned

Heat added

could save a lot here

You don't realise how good you got it. Worring about half a percent or so. Back in the day my mortgage rate was 15% !

This is a blinding deal. Shame about £1000 fee but that's quite common these days. Fees seem to have doubled & very few don't charge. I was going to fix but was a lucky Nationwide customer who reverted back to 2.49% after my last 5 year fix. Just hanging out the last few years hoping the Tories don't push rates up to 15% like last time they were in.

No base rate increase forecast until 2016.

We are just at the beginning of a mortgage price-war due to the government's Funding For Lending scheme (which is also driving savings rates down, by the way).

Great deal at the moment, but won't be top of table come ISA season when banks and building societies will have more capital than they know what to do with.

Jus' sayin'.

liamf12

This is a blinding deal. Shame about £1000 fee but that's quite common … This is a blinding deal. Shame about £1000 fee but that's quite common these days. Fees seem to have doubled & very few don't charge. I was going to fix but was a lucky Nationwide customer who reverted back to 2.49% after my last 5 year fix. Just hanging out the last few years hoping the Tories don't push rates up to 15% like last time they were in.



Government don't set base rate anymore.

Good deal for a fixed but I'm happy on our 1.45% rate at the moment.

Bham post office got specialists in branch who help you...

jonneyt

No base rate increase forecast until 2016.We are just at the beginning of … No base rate increase forecast until 2016.We are just at the beginning of a mortgage price-war due to the government's Funding For Lending scheme (which is also driving savings rates down, by the way).Great deal at the moment, but won't be top of table come ISA season when banks and building societies will have more capital than they know what to do with.Jus' sayin'.



Jonneyt - when will the ISA seaon be? I'll be looking to re-mortgage around April this year.

MrMajic

Jonneyt - when will the ISA seaon be? I'll be looking to re-mortgage … Jonneyt - when will the ISA seaon be? I'll be looking to re-mortgage around April this year.



ISA activity ramps up in March as people try to max their allowance and peaks in April when the new tax year starts.

jonneyt

ISA activity ramps up in March as people try to max their allowance and … ISA activity ramps up in March as people try to max their allowance and peaks in April when the new tax year starts.



Thanks. That's perfect timing for me.

Fab deal. Beats the hell out of my 4% rate which I am unfortunately stuck on because I'm self employed. Heat added.
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