Tesco Bank slashes mortgage rates

Tesco Bank is to cut interest rates across its range of mortgages just a month after offering mortgage products for the first time.

Reductions have been announced for both tracker and fixed rate mortgages with its two-year tracker deal for those with a 30 per cent deposit being charged at a rate of 2.95 per cent with booking and product fees totaling £995.

Its two-year fixed rate deal comes in at 2.99 per cent for borrowers with a 30 per cent loan-to-value (LTV) ratio, again with fees of £995.

Tesco Bank has also cut the rate on its three-year fixed rate deal. Borrowers are charged at 3.28 per cent with the same fees and LTV limits.

Homeowners opting for a longer term deal can take advantage of its five-year fixed rate deal which applies a 3.39 per cent interest rate for borrowers meeting the same LTV criteria and has the same fees.

The five-year fixed rate mortgage product takes Tesco close to the top of the best-buy tables for that length of deal for borrowers with just 30 per cent equity.

HSBC has a deal at 3.29 per cent, but borrowers need to have a 40 per cent deposit to qualify for the product.

David McCreadie, Managing Director of Banking at Tesco Bank, said: "We're pleased to offer customers some good news by reducing our rates to as low as 2.95%. Today's rate changes once again underline Tesco Bank's commitment to offering highly competitive banking products which meet our customers' needs today and as they continue to bank with us into the future."

Tesco mortgage customers who have a Clubcard can benefit from one point for every £4 they pay in mortgage repayments.

Borrowers are free to make regular or lump sum overpayments up to 20 per cent of the outstanding balance each year without incurring an early repayment charge