Tesco adds mortgages to its banking basket
Tesco Bank extends its range of banking services with the launch of mortgages.
Tesco Bank mortgages, which will be available from Monday 6 August, combine great rates with competitive fees to suit customers, whether they are remortgaging or buying a new home.
As a unique feature, Tesco Clubcard holders will be rewarded with Clubcard points as they repay their mortgage, and will collect one point for every £4 on their monthly mortgage repayments.
Philip Clarke, Chief Executive, Tesco said: "Customers want choice in banking from a brand they know and trust to deal with them fairly. The launch of Tesco Bank mortgages is a major milestone towards offering Tesco customers a full retail banking service."
Benny Higgins, Chief Executive of Tesco Bank, commented: "Entering the mortgage market is a significant step in broadening the products we offer to Tesco customers. With a focus on serving Tesco customers for the long-term, we will take responsible lending decisions and have developed a mortgage business to meet our customers' needs now and into the future.
"We begin as we plan to go on - launching a product for Tesco customers designed to meet their expectations of value, customer service and reward."
The Tesco Bank mortgage product range includes two, three and five-year fixed rate mortgages, and a two-year base rate tracker. Rates start at 3.19% (2 year fixed, maximum LTV of 70%) and Tesco Bank offers mortgages up to a maximum of 80% LTV. All products will move onto the Tesco Bank Standard Variable Rate at the end of the initial fixed or tracker rate period. There is a flat booking fee of £195 on all products and customers can choose between a £0 or £800 product fee option to suit their needs. Early Repayment Charges apply during the initial rate period.
The launch range of products has been developed to be flexible and straightforward:
All of the products provide customers with the flexibility to make regular or lump sum overpayments of up to 20% of the outstanding balance each year during the initial rate period, without having to pay an Early Repayment Charge.
Customers opting for a tracker mortgage can take advantage of a ‘switch and fix' facility that allows them to move to a fixed rate if they require greater financial certainty.
Customers can apply for two payment holidays per year.
Those remortgaging will benefit from free standard legal and valuation services.
Andrew Hagger of Moneynet welcomed Tesco Bank's entry into the mortgage market. He commented: "Consumers should benefit from the extra competition that Tesco Bank will bring to the mortgage sector as it battles for new business with the established high street lenders.
"Tesco Bank already has a solid reputation for good value personal finance products, frequently appearing towards the top of the best buy tables in the savings, personal loan and credit card markets.
"The combined mortgage package of competitive rates, flexible product features plus the ability to earn rewards is likely to appeal, particularly to the millions of loyal Tesco Clubcard customers."
For more information on mortgages, visit tescobank.com.