New mortgage deals entering the market by Tesco

Tesco supermarket group has announced that Tesco Bank is now offering new mortgage deals.

Online PR News – 03-September-2012 – 9/3/2012, Wilmslow, Cheshire – Wilmslow, Cheshire Tesco supermarket group has announced that Tesco Bank is now offering new mortgage deals.

Tesco Bank will start to offer mortgages to their customers, and that customers will be able to use their Tesco Clubcard points to assist with their mortgage payments each month.

This new mortgage deal entering the market requires a minimum 20% deposit and they are offering primarily fixed rate deals. The rates currently range from 3.19% to 5.09% despite several large lenders offering fixed-rate mortgages with an interest rate below the 3% mark.

This shows that the entry of Tesco into the mortgage market will not increase competition, given their high entry rates. However, the mortgage deals that they are offering does give customers the opportunity to repay 20% of the loan every year without a penalty, which will appeal to many customers who are keen to repay their mortgage over and above the agreed repayments.

It is yet to become clear whether the mortgage deals offered by this supermarket giant will appeal to customers, they may feel that a mix of offering grocery products, Clubcard points and taking out a large mortgage from one organisation is taking things too far. Time will tell whether Tesco have made a sound decision

or not - if they have then no doubt the other supermarket giants like Sainsburys who already have a banking arm to their business, will certainly follow.

Richard Ignatowicz is a whole of market broker at Mortgage Savers. He says:

"Every little helps" but not in this case! Requiring a 20% deposit is not exactly aimed at the all important first time buyer without whom the property market will remain stagnant. Even for those with this type of deposit the rates are just not competitive so its probably aiming at less savvy Tesco customers who believe that they are getting a competitive mortgage deal on the mistaken assumption that Tesco are offering cheap supermarket type mortgages!"

Richard Ignatowicz, who runs Mortgage Savers is a "whole of market" mortgage brokerage. They are fully qualified consultants, not sales reps; offering totally impartial help and guidance. They help people find the best residential, commercial or buy-to-let mortgage product available from over 200 lenders offering in excess of 10,000 mortgage products.

For more details vist: