Tesco Bank says it has no plans to lend above 80 per cent loan-to-value as it says there is little demand for higher LTV products among its customer base.
The lender launched this week with a direct range of two, three and five-year fixed rates, and a range of two-year trackers, with a maximum LTV of 80 per cent.
In an interview with Money Marketing, Tesco Bank managing director David McCreadie says he sees little demand for higher LTV products.
McCreadie says: “We have no intentions of launching anything other than what we have in our launch range. That may evolve over time but we certainly have no firm plans and no dates fixed when we may look to expand.
“The reality is only 2 per cent of all lending was over 95 per cent LTV in the first half of this year, so the majority of Tesco customers are not looking for anything in excess of 95 per cent LTV. There are no plans at this stage to do anything above 80 per cent.”
Chadney Bulgin mortgage partner says Jonathan Clarke says: “If there were some more competitive 90 to 95 per cent mortgages available I think they would represent a more significant part of the market.”
McCreadie says Tesco has no plans to offer its products through brokers, however the lender may be forced to offer an advised service if the FSA implements its proposed ban on non-advised sales as part of the mortgage market review.
Some commentators have described Tesco’s launch range as unadventurous because the rates are not as competitive as some of its rivals.
McCreadie says: “The reality for our rates is that you do not have to have a 40 per cent deposit, you are not paying the highest fees in the market and you do not have to have your main bank relationship with Tesco Bank to access our products.”