The group is trialling three mortgage products through selected branches in the North of England.
The products are a three-year fixed rate at 6.09 per cent, a fixed rate buy-to-let mortgage at 6.35 per cent and a self-cert discount rate at 6.44 per cent.
The Post Office has it will operate a transparent pricing structure for the products, including a low-cost fixed arrangement fee of £399, no higher lending charges and no hidden charges.
With the mortgage market became increasingly complex, the Post Office has seen a niche open up for the provision of good value straightforward mortgages.
The trial will run into next year, after which the Post Office will analyse statistics including the level of uptake and customer feedback before making a decision as to whether it will roll them out on a permanent, nationwide basis.
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. This is why we have developed products with good initial and long-term value.
"Throughout the duration of the trial we will be assessing whether this belief stands true.
"At the same time we will ensure we provide the products and the service quality expected from the Post Office. A formal evaluation will take place at the end of the trial, which will inform how we proceed."
Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: “The Post Office brand has traditionally done well on low-cost or low-risk financial products such as guaranteed savings accounts and credit cards but mortgages are a completely different ballgame. It is surprising for Bristol & West to use a brand which is untested in a product area of this complexity.
“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, even with its relatively low arrangement fee. 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.”
