Other two-year fixes in the Bank's new range include an 85% LTV at 1.89% and an 80% LTV at 1.69%, both with a £1,300 product fee.
The products are available for first-time buyers, home movers and those looking to remortgage, who will also benefit from free standard legal fees.
Customers can 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.
David McCreadie, Managing Director, Banking at Tesco Bank, commented:
“We are pleased to launch our new 2 year fixed rate mortgage products, which include a market leading rate for our 90% LTV product and further widen the options available to customers looking to take their first or next step on the property ladder.”
In February, Tesco announced plans to begin selling mortgages through intermediaries from early next year.
In a Telegraph interview, Benny Higgins, chief executive of Tesco Bank, said:
“We’ve been [in the direct market] for over two years now, and we realised that while we’re happy with how it’s going, we are only serving a modest proportion of Tesco customers. We’re operating in less than 10 per cent of the market.
“Whilst it wasnt our intention at the very outset, it is clear to us that over half of Tesco customers are buying mortgages through brokers and that number is increasing under the new regulatory code.”
The move is expected to considerably increase mortgage business for the Bank. In November, the Telegraph reported that the company was in the early stages of examining a potential partial float of Tesco Bank to raise between £500m and £1bn.
Tesco has sold more than £1bn worth of home loans since it started offering mortgages two and a half years ago.
