Confusion Reigns at The Post Office

Posted on 12 July 2013 by Ray Boulger

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The Post Office yesterday cut several of its mortgage rates and its press release claimed that several of the new rates are “best in market.” Indeed some are but not all those it claims to be. For example one of the products the Post Office claims is “best in market” is its 2 year fixed rate to 80% LTV, which has been cut from 2.79% to 2.74% (with a fee of £995 and no freebies).

Ignoring 2 year fixed rates to 80% LTV with a higher fee, so as to only compare like with like, Accord offers a 2 year fix to 80% LTV at 2.34% with a marginally lower fee of £975. This mortgage was launched on 1 July and it is difficult to understand why The Post Office thinks a rate of 2.74% is “best in market” when another lender offers a comparable mortgage with a much lower rate and a slightly lower fee.

However, a much bigger issue in this press release is the fact that The Post Office’s Head of Mortgages says: “People want choice and our specialists are there to give friendly and knowledgeable advice for (sic) anyone trying to work out what is best for them."

The word “advice” in this quote stood out like a sore thumb as I wasn’t aware that The Post Office had started giving advice. I thought perhaps it had managed to get ready in good time to comply with MMR and so phoned its call centre, where I was promptly greeted with the following recorded message: “Welcome to the Post Office. We will provide you with an information only service on our range of mortgage products.”

So is The Post Office now giving advice or is it still an information only lender? I am none the wiser but if its Head of Mortgages says one thing and its call centre says the opposite it will be interesting to see how it covers that on its KFIs!

Categories: Mortgages, Regulation

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