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Tesco launches sub-2% mortgage rate

19th October 2012 | back to article listings BACK    print this article PRINT

Tesco Bank has increased competition in the mortgage market by offering a rate below the 2% barrier.

It has reduced its two year-fixed rate from 2.64% to 1.99%, although those wishing to capitalise on the deal need to come up with a heavy 40% deposit.

In addition, Tesco has cut the rate on another two-year fixed deal from 2.79% to 2.39% for borrowers with a 30% deposit.

Both deals carry fees of 995 and are available to customers who are remortgaging or buying a new home.

The financial arm of the supermarket chain said it was able to make the reductions due to its plans to use the Government's 'Funding for Lending' scheme which aims to kick-start lending in the UK property market by offering banks access to cheap funding.

Rachel Springall, spokeswoman for comparison website Moneyfacts, described the rates as "attractive" and revealed the last time a similar fixed deal was offered at 1.99% was around a year ago.

Copyright Press Association 2012

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