As part of a new financial services product range, the Post Office, in alliance with Bristol and West, will also be offering savings accounts, credit cards, and personal insurance, all traded under the Post Office’s own brand.

Their mortgage range, due to be launched early next year, will include a three-year fixed-rate deal at 6.09% on loans of up to 95% of the property’s value.

Deals will also be available for buy to let investors and self-employed borrowers, with rates of 6.35% and 6.44%, respectively. Loans will not be available to sub-prime borrowers, and to those wanting to borrow more than 95% of a property’s value.

Gary Fitton, director of lending at the 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”.

All loans will carry an arrangement fee of just £399 and will not impose higher lending charges.

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Commenting on The Post Office’s decision to enter the mortgage market, Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: “In an environment where consumers are being increasingly squeezed, they are naturally looking for the lowest headline rate, and their heads are not going to be turned by the Post Office’s best rate of 6.09 per cent.

“We always like to see competition in the mortgage market but I can’t see this proving a threat to the more established lenders who are able to offer much more competitive deals.”

All Post Office financial services will be available to customers through branches, over the phone and via the internet.

To compare further mortgage rates, check out our Best Buy Table.