In what must be seen as a significant influence on the UK mortgage market, the Post Office announced this week that it is cutting rates for its fixed-rate and tracker mortgages.

The reduction of up to 1.01 per cent in the mortgage rates has catapulted many of the deals to the best-value charts.

Perhaps the biggest rate cut is to the Post Office’s five-year fixed-rate deal, which has a 75 per cent loan-to-value (LTV) and a £995 fee. For borrowers who can find a 25 per cent deposit, rates have been cut from 4.39 per cent to 3.38 per cent.

For customers who can afford a 65 per cent LTV mortgage, the Post Office has also slashed rates on its two-year fixed-rate deal down to 2.73 per cent. A three-year version of this mortgage comes with a 2.95 per cent interest rate – and both products also have a £995 fee.

Head of Post Office Mortgages Mike Cook said that the rates on its three-year fixed-rate deals were the lowest ever, adding: “We’re really pleased to be able to expand our range and offer some very low rates across our fixed rate and tracker mortgages for those with varying deposits.”

“The Post Office mortgage book has grown significantly since launch and we’re now looking to expand our business to a wider range of customers.”

Mr Cook went on to point out that the Post Office is also offering new tracker mortgages, plus fee-assisted mortgages, which greatly reduce customers’ upfront costs.

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