3 unusual places you can get a great mortgage deal

While a number of large lenders continue to dominate the UK mortgage market, competition is fierce. Small building societies and so-called ‘challenger banks’ often offer specialist products and great rates, but there are also even more unusual places offering home loans.

The AA

Originally established in 1905 as an organisation to warn other motorists about speed traps, the AA has come a long way over more than 100 years. As well as offering traditional breakdown cover, the AA now offers a range of financial services products, including mortgages. Their new mortgage range offers a number of competitively priced two-, three- and five-year fixed rates, including some excellent ‘fee free’ deals at 90 and 95% loan to value.

Available with a 5% deposit, AA Mortgages offer a five-year fixed rate at 3.99% with no fee. They also offer a two-year fixed option at 3.82% with no fee, a free valuation and £400 cashback.

Customers can also benefit from free standard legal fees and AA features including 15% off AA home insurance, 12 months AA Home Response Plus and AA Central Heating Response Plus coverage on selected mortgage products.

Michael Johnson, director of financial services at the AA said: “The AA is here to help and we are now able to offer a selection of mortgages to suit a variety of buyer needs. This competitive range aims to make mortgages simple and straightforward, with options for an array of borrowers – whether it’s those wanting to take their first step onto the property ladder or those simply wanting a better deal by re-mortgaging.”

Your supermarket

Considering that large supermarkets sell almost everything that you might need in your daily life, it’s perhaps no surprise that two of the main retail players also offer competitive mortgages.

Tesco offers a range of fixed- and tracker-rate deals starting at just 0.98%. As well as allowing you to pay up to 20% of the outstanding balance each year without penalty, Tesco mortgages also offer Clubcard points on your repayments.

Sainsbury’s deals start at 1.14% for a two-year fixed rate, and all their products come with a free standard valuation. They also offer remortgages to 90% loan-to-value, and these deals come with both a free valuation and fee-assisted legals.

The Post Office

For several years, some of the UK’s most competitive mortgage deals have been offered through the Post Office. Post Office mortgages are provided by the Bank of Ireland and offer some excellent rates and benefits. Their deals currently start at 1.17%, fixed for two years, and many of their deals come with a free standard valuation.

They also offer deals to 95% loan-to-value for homemovers. Their two-year fixed rate at 3.99% comes with a standard valuation and £500 cashback. Deals can be accessed by telephone, or you can make an appointment with an in-branch adviser.