Post Offce - Fixed Rate Changes - Any idea?

olbigead

Hi all,

I've just spoken to the Post Office asking about their 5yr Fixed for 90% LTV which is currently at 5.85%. The person I spoke to was very helpful and explained some of the details but then mentioned 'but obviously the only major thing that would change would be the rate'.

Initially this confused me as a fixed rate is a fixed rate - but then he explained that "Oh...our fixed rates are changing on 3 March".

Anyone heard anything about this or have any idea what they are going to change to (the guy I spoke to said he didn't know). Surely they wouldn't be going up would they with all the base rate cuts? (I know base rate cuts don't directly effect Fixed Rates - but isn't the trend showing FR are slowly coming down too?)

beecher

They may well go up for high LTVs, as there is more of a risk attached to them. 5.85% is cheaper than a lot of other 90% deals I think, so maybe they feel they don't want any more 90% customers. Alternatively maybe they're cutting them - hard to say.

If you want the deal you could ask how you go about booking it before 3 March, with the proviso that you go onto a lower deal if it comes up before you complete?

olbigead

Good idea. I'll try that!

Robert_Sterling_3

olbigead wrote: »

Initially this confused me as a fixed rate is a fixed rate - but then he explained that "Oh...our fixed rates are changing on 3 March".

If you take out a five year Fixed Rate at say 5.49% then for 5 years YOUR RATE is fixed at 5%.

That does not mean that everyone's Fixed Rate will be the same as yours or that you would get that rate if you had taken out a loan at a different date.

olbigead

Robert_Sterling wrote: »

If you take out a five year Fixed Rate at say 5.49% then for 5 years YOUR RATE is fixed at 5%.

Am I right in assuming that in your example above you mean "your rate is fixed at 5.49%"?

olbigead

They are actually withdrawing their 5.85% mortgage today for 90% LTV.

Their new rate is going to be 6.02% (or 6.01%, can't remember which one they said)

So it looks like they are protecting themselves further from 'risky' 90% LTV's. Shame, I thought Fixed Rates might start to drop soon. Looks like I'm just going to have to keep building that deposit!!