Supermarket Chain Tesco launch range of mortgages

2 Minutes Read

Whilst we might be more used to picking up our weekly groceries from leading supermarket Tesco, the company are adding another string to their bow, in the form of a range of mortgage products.

The news comes a massive three years after they originally announced they would be adding the service to their growing range of products that include car insurance and mobile phone contracts.

These mortgages are said to be targeting the ‘majority’ of their customers, but those wishing to take up their loans will need a deposit of at least 20% of the property value, alienating many first time buyers with smaller deposits.

The supermarket chain does plan to offer a full range of mortgage products in the future that will rival many high street banks but currently offer 2 year, 3 year and 5 year fixed rate mortgages.

Currently Tesco are offering a 5 year fixed rate at 3.89% with £800 product fee and a tracker mortgage that will run 2.69% above bank rate with a similar fee to the 5 year deal.

Obviously the head of Tesco Bank, David McCreadie believes the initial offering is good value for money but some mortgage experts aren’t too convinced by the offering, stating that the uncompetitive rates being offered will put off a lot of people.

Customers who are interested can organise their mortgage online or over the phone rather than visiting their nearest branch of the supermarket.

One benefit to customers choosing the supermarket’s offering, is gaining clubcard vouchers each month for their repayments. Thought to be around 250 points / £2.50 off for someone paying £1000 month off their property loan.

Only time will tell if the public take to the current offerings from the brand or will wait until they offer more competitive deals with their future offerings.