Mortgage holders could be struggling at the moment as coronavirus continues to impact the housing market and high SVRs could be creating mortgage “prisoners”. The All Party Parliamentary Group (APPG) warned that rates as high as 5.35 percent are being reported.
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These rates are primarily from some of the UKs largest banks and building societies and Seema Malhortra, an MP and Co-Chair of the APPG, commented on the findings: “Too many mortgage prisoners have been exploited by being held on high Standard Variable Rates or have seen their rate increased with no justification.
“The CMA and the FCA should intervene quickly to cap the interest rates being charged.
“The coronavirus has led to unprecedented strain on family finances and we need to help mortgage prisoners, including many key workers, get a better deal.”
While many people may only think of banks when it comes to mortgage offers, they may not think of turning to the Post Office with their financial concerns.
This could be a missed opportunity for some as the Post Office currently has a number of mortgage deals available, with rates lower than the 5.35 percent figure quoted by APPG.
For those looking for fixed rate mortgages, the Post Office currently has four options available.
All of the options have an initial rate period and once this has ended, the mortgage will revert to a standard variable rate of 4.09 percent.
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Currently, customers can apply for mortgages with the following specs:
- 40 percent deposit (60 percent loan to value)
- 25 percent deposit (75 percent loan to value)
- 20 percent deposit (80 percent loan to value)
- 15 percent deposit (85 percent loan to value)
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All of these mortgages can be offered on a two or five year fixed basis.
Depending on the option taken, there can also be additional benefits and/or cash back perks.
To ensure that the customer in question has everything they need to move forward, the Post Office also provides a mortgage affordability calculator.
This tool can provide an estimate of how much the Post Office could lend the user and it only requires a certain amount of basic information.
To use the calculator, the person involved will need to detail:
- How many adults are involved
- How many children they have
- The applicant(s) annual income levels
- Their deposit figure
- If they’re looking to borrow more than 90 percent Loan to Value (LTV)
- What mortgage term they’re after and
- Their monthly outgoings (costs)
Once all this information is entered, the user will be given an exact figure of how much they may be able to borrow and will then be guided on the next steps.
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