This week, the Post Office has revamped its mortgages range and entered the best buy league. It has launched a new base rate tracker as well as fixed rate mortgages over two and three years plus a five year mortgage deal that saw it into the best buy tables.

The new five year mortgage deal is a fixed rate at 5.09 per cent however, it is only for a 60 per cent loan to value ratio and even at that, has an arrangement fee of £599.

As we have seen, the UK mortgage market is slowly starting to recover but has yet to regain the competitive stance that mortgage lenders were taking a mere two years ago.

It is certainly pleasing to see the Post Office open new mortgage deals but also a disappointment to see the loan to value ratio restricted at 60 per cent meaning it certainly cuts out nearly all first time buyers, especially when it is this target sector that would allow others to sell and move on.

However, the new mortgage arrangements from the Post Office may indeed encourage other mortgage lenders to improve their own offerings as we expect the UK housing and mortgage market to continue to improve – 2010 will be an interesting year no doubt in the mortgage sector.

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