Tesco Bank has pulled its 1.99 per cent two-year fixed rate less than a month after it was launched.
The direct-only lender slashed the rate on its 60 per cent LTV product by 0.65 per cent from 2.64 per cent to 1.99 per cent on 19 October.
But yesterday it pulled the deal, saying all the funds allocated for the 1.99 per cent deal have been used up.
The bank’s top rate is now the 2.39 per cent two year fix at 70 per cent LTV, which it also reduced by 0.4 per cent from 2.79 per cent on 19 October.
Trinity Financial head of communications, marketing and products Aaron Strutt says: “It has been available for nearly a month and it has done quite well to make it that long. It means the gap between the best rates for direct business has shortened.
“While it is never good to lose a good rate, it levels the playing field for brokers.”
The lender finally launched into the mortgage market on 6 August with a range of two, three and five-year fixed rates, and a range of two-trackers, with a maximum LTV of 80 per cent. It had originally planned to launch into the mortgage market in the summer of 2011 but its entry was delayed by IT problems.
In September, it slashed its rates by up to 0.5 per cent and cut them again at the beginning of October by up to 0.4 per cent at the same time as it introduced two 60 per cent LTV products, before slashing its products further on 19 October.
When it first launched the 1.99 per cent deal, Tesco Bank revealed the low rate was made possible by its participation in the Government’s Funding for Lending Scheme.
At the end of October it was revealed that Tesco Bank was one of 17 lenders that had joined the scheme, with the supermarket owned lender having a base loan stock of £4.8bn.