Post Office is the Latest to Offer 90% LTV Mortgage Deal

By: Katie Jenkins
13-May-2010

In a bid to attract new mortgage business from first-time buyers, the Post Office announced its 90% loan to value mortgage deal earlier this week.  This product is one of a number of new mortgage deals offered by the Post Office as it continues to gain prominence in the UK's mortgage lending market.

The 90% LTV deal offers a 5.45% fixed rate mortgage for the first two years, followed by a variable rate of 2.99% over the Bank of England's base rate (currently working out as 3.49%) for the remainder of the mortgage period.  With a 999 GBP arrangement fee, this brings the overall cost for comparison (APR) to 4.1%, which is competitive when compared to similar home loan deals from more established lenders.

However, varying interest rates aside, it is encouraging that a number of high-street lenders are now offering 90% LTV mortgage rates, including HBSC and Santander.  The return of higher loan-to-value mortgage deals is great news for first time buyers, many of whom have been prevented from getting onto the property ladder by the property market crash - and the subsequent belt-tightening by mortgage lenders.  

The past three years have been a frustrating time for new homebuyers, because many of those that could not afford the more sizeable deposits were put off by the high interest rates (almost 9% in 2008) that were charged on riskier mortgages.  Now things are not just looking up for new homebuyers, since many of the 90% LTV mortgage rates  - including the Post Office deal - are also available for those planning to remortgage their property.  New entrants to this market also means a greater level of competition, further driving down the rates.

So if you have been sitting on your mortgage deal for a while or you've been unable to afford a higher deposit, now might be the time to check out the market and see what deals are available. 

Fill out our short form to request a callback from an experienced mortgage adviser, who will be able to advise you of the best deals available for your circumstances.