Tesco launch own brand mortgages

The supermarket giant Tesco has announced the launch of its own mortgage range.

14:40 03 November 2004

The supermarket giant Tesco has announced the launch of its own mortgage range.

Home-owners will be able to apply for the low-cost loan over the internet or by phone.

The mortgages will be directly linked to the Bank of England interest rates for the first three years, before climbing 0.99 per cent higher from then on.

Alistair Smillie, Tesco's mortgage chief, noted: "By applying Tesco value and pricing, we believe home-buyers will now have a real money-saving alternative to many of the over-complicated products offered elsewhere," he said.

But mortgage broker Rob Clifford told the Times newspaper: "Tesco will face tough competition from other lenders' well-priced fixed deals and the swell of consumer appetite for the security of fixed monthly payments."

The loans will be backed by Tesco and its partner the Royal Bank of Scotland, joint owners of Tesco Personal Finance.

Supermarket rival Sainsburys stopped selling mortgages this summer after a disappointing take up.