Post Office the latest lender to offer 95% loan-to-value mortgages as part of Government's Help to Buy scheme.
The Post Office has confirmed details of its Help to Buy mortgages.
The lender announced at the start of the year that it would be joining the Government's scheme, which sees borrowers able to access homeloans even if they only have a 5% deposit.
Two mortgages are on offer, neither of which comes with any arrangement fees.
The two-year fixed deal comes with a rate of 4.95%, while the five-year fixed deal has a rate of 5.35%.
Compare mortgage rates with lovemoney.com
[SPOTLIGHT]How Help to Buy works
Help to Buy is comprised of two different schemes. These mortgages are available as part of the Help to Buy: mortgage guarantee scheme.
A deposit of 5% is needed to take on a mortgage, while the lender offers to lend 95% of the remaining value of a property. The Government acts as a ‘guarantor’ on the mortgage, meaning that they will step in to compensate the lender if you default on payments and your property is repossessed.
To learn more about both parts of Help to Buy, read Help to Buy mortgages explained.
Compare mortgage rates
See how the Post Office’s two-year fixed rate deal compares to other lenders’ Help to Buy rates:
| Lender | Initial interest rate |
Fee |
More information |
|
Norwich & Peterborough Building Society |
4.79% |
£845 |
|
|
HSBC |
4.79% |
£99 |
Call 0808 115 8734 |
| Post Office | 4.95% | £0 | Available in branches |
|
Norwich & Peterborough Building Society |
4.99% |
£0 |
|
|
Royal Bank of Scotland |
4.99% |
£0 |
|
|
NatWest |
4.99% |
£0 |
As you can see, when it comes to fee-free deals, the new two-year Post Office Help to Buy mortgage comes with the lowest rate around. However, if you are happy to stump up a fee - even one as low as £99 - you could cut that rate down further.
What about the five-year deal?
| Lender | Initial interest rate | Fee | More information |
|
Norwich & Peterborough Building Society |
5.09% |
£845 |
|
|
HSBC |
5.19% |
£99 |
Call 0808 115 8734 |
|
Norwich & Peterborough Building Society |
5.29% |
£0 |
|
| Post Office | 5.35% | £0 | Available in branches |
| Virgin Money | 5.49% | £99 | Call 0845 805 4739 |
| Royal Bank of Scotland | 5.49% | £0 | Go to our mortgage centre |
| NatWest | 5.49% | £0 | Go to our mortgage centre |
So again Post Office performs pretty well, though there is a superior fee-free mortgage on offer from Norwich & Peterborough Building Society.
This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker, before acting on anything contained in this article.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
More on mortgages:
Help to Buy mortgages explained