Tesco Bank will now lend to 85 per cent loan-to-value after it launched a new range of products for borrowers with a 15 per cent deposit.
It has launched a two-year fixed rate at 3.29 per cent, a three-year fixed rate at 3.59 per cent and a five-year fixed rate at 3.69 per cent. These products come with a £1,300 product fee and a £195 non-refundable booking fee. Previously, Tesco lent to a maximum LTV of 80 per cent.
The lender has also launched a two-year tracker at 3.25 per cent, which has an £800 product fee.
The loans are only available direct. Customers who take out a Tesco Bank mortgage receive one Clubcard point for every £4 they repay on their mortgage.
Tesco managing director of banking David McCreadie says: “We aim to be the financial services provider of choice for Tesco customers by providing great value, good service and rewarding loyalty. We are committed to lending responsibly and our highly competitive mortgage range is now accessible to even more Tesco customers.
“Our mortgage products combine all the hallmarks that customers expect and deserve from a Tesco Bank mortgage; great rates, competitive fees and the added thank-you of Clubcard points.”
Coreco director Andrew Montlake says: ”It was only a matter of time before Tesco tried to push into the higher LTVs once it found its feet. These rates are good but whether many people will want to go to Tesco for their mortgage remains to be seen.”