Post Office to trial mortgages in the North East

by Alex Donohue Brand Republic 27-Sep-07, 16:30

LONDON - The Post Office is to trial selling mortgages from selected branches in the North East of England, using Bristol & West and the Bank of Ireland's lending arms as partners.

Post Office Mortgage will offer three different products led by a three-year, fixed-rate mortgage at an initial rate of 6.09%.

The trial is located in the traditional heartland of troubled Newcastle-based lender Northern Rock.

Post Office customers can take out the mortgages at Post Office branches across North East England, online or via the company's customer call centre, where all applications are processed.

The trial will add to the range of financial services already offered by Post Office, which include savings and insurance products.

Each of the three mortgage products will have a transparent pricing structure, a low-priced fixed arrangement fee of £399, no higher lending rates and a conversion rate that Post Office described as competitive.

Industry analyst believe the company's strong national network of branches, of which 550 are managed directly by Post Office, will act in its favour.

Gary Fitton, director of lending at Post Office, said: "We believe there is a real need for straightforward mortgage products, which don't entice customers with headline-grabbing rates and then penalise them with huge fees. This is why we have developed products with good initial and long-term value."

Fitton added that a formal evaluation of Post Office Mortgage would take place at the end of the trial period, in order to assess how the service will proceed.