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Thursday, October 04, 2007

Post Office To Offer Mortgages

The Post Office is launching a new mortgages product in the North of England. Despite denying it, the timing and area of the product launch coincides nicely (for the Post Office) with the Northern Rock debacle.

The three new products, offered in conjunction with Bristol & West, include a fixed-rate mortgage and a buy-to-let deal; they will be promoted in 100 Post Offices across the region.

If the trial run is successful, the mortgages will be rolled out in the Post Office's 1,600 branches across the rest of the country at the beginning of next year.

The Post Office mortgages consist of a three-year fixed rate at 6.09%, a three-year variable-rate at 0.8% below the Post Office's standard variable rate, currently charging 6.44%, and a buy to-let loan, fixed at 6.35% for three years.

These rates are not the best on the market, and potential borrowers would be well advised to shop around.

Whilst the Post Office dabbles in activities not normally associated with its core brand, it faces rather serious issues in its mainstream business.

The announcement that it will close 180 post offices has not gone down well, and the postal strike that will last this week and part of next week will not help secure its future. Customers will inevitably seek other, more reliable, service providers.

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