First Tesco mortgages launch today

From today, Tesco Bank will be launching their much-discussed mortgages.

Related topics:  Mortgages
Amy Loddington
6th August 2012
Mortgages
- 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

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 competition that Tesco's mortgage range will bring to the sector has been the topic of much discussion and praise, with Andrew Hagger of Moneynet - a consumer comparison website - commenting:

"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."

However, others have been left wondering how Tesco will establish themselves as competitors in the sector with the range they are offering. Sylvia Waycot of Moneyfacts.co.uk described the range as "disappointing" and commented that "despite having successful cards and loans to its credit, Tesco Bank on entering the mortgage sector have not launched any market leading deals. Its current proposition of fixed and tracker mortgages can be beaten by what is currently available on the High Street."
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