Post Office to launch loans

Royal Mail will add an extra string to its bow shortly. Its financial service branch is all set to launch its own mortgage deals with the help of the Bristol & West bank. For the time being though it is only available as a trial in the north east of England, obviously trying to fill the hole that Northern Rock seems to have left. If all goes to plan though, the service could be sent out across the UK in the coming months.

Since Northern Rock aired its recent troubles to the world, the Post Office has seen a rise in people opening up savings accounts with them probably because they are seen as a 'safe place'. They have more than likely seen this as the perfect time to launch such a product, making the most of the trustworthy name the Post Office emanates. September is also a peak time for homeowners wanting to re-mortgage or change lenders as many deals seem to end about this time of year.

The mortgage deal will be backed by Bristol & West who are the UK mortgage branch of the Bank of Ireland. Because of this, the Post Office will more than likely be resistant to the Northern Rock problem, as the Bank of Ireland is able to borrow from the European Central Bank. Unlike Abbey who have started to offer 125% mortgages despite the current credit troubles around the world, the Post Office are steering well clear of the sub-prime market and will only offer a mortgage to those who have no bad credit history and are looking for a mortgage of less than 95%.

They want to provide honest loans with no hidden costs. Their offerings will include a fixed mortgage deal over 3 years with a rate of 6.09% which seems like a pretty good deal. However their other 2 deals aimed at landlords and those who are self-employed are not so competitive as the rates go up to 6.35% and 6.44% respectively. All have a one-off arrangement fee of £399. Applicants can phone, go online or visit selected branches of the Post Office to enquire or apply about