Tesco launches 1.99pc mortgage deal

worldtraveller

Competition in the mortgage market increased further today as Tesco Bank slashed its rates and launched a deal at below 2pc.

Its new range includes a market-leading two year fixed-rate mortgage at 1.99pc, down from 2.64pc previously, although borrowers need a hefty 40pc deposit to take out the deal.

Tesco has also dropped the rate on another a two-year fix from 2.79pc to 2.39pc for borrowers with a 30pc deposit and said it was able to make the rate cuts due to its plans to use a Government scheme to kick-start lending by offering banks access to cheap funding.

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

Telegraph.co.uk

Sandstone

I came here to see what everyone thinks of this new product - possibly the best mortgage the UK has ever seen, according to the Independent.

http://www.independent.co.uk/money/mortgages/the-cheapest-mortgage-in-britain-tesco-launches-199-mortgage--but-you-need-a-hefty-40-deposit-8218010.html

Thoughts?

ACG

Cracking deal! Not sure what their criteria are and how strict they will be with applications but you cant argue that its a good deal.

Thrugelmir

Sandstone wrote: »

possibly the best mortgage the UK has ever seen,

Wasn't so long ago that all mainstream lenders all tracked base +2% as there SVR.

Short memories...............

Sandstone

Yes Thrugelmir, but base wasn't 0.5% back then was it, so in terms of the raw figures, this is as low as it's ever been for a 2yr fix, as far as I'm aware.

userdefinable

Has anyone managed to apply for this mortgage?

I did so online and completed the progress, it said someone would call. No one has and I have not received any emails from them. It's over a week since I did this.

The only way to contact them is an 0845 number and I only have a mobile to call from. There doesn't seem to be a way to email them and the web chat is always offline.

Hmmm.

Thrugelmir

Sandstone wrote: »

Yes Thrugelmir, but base wasn't 0.5% back then was it,

Nor do lenders raise funds at less than 0.5%.

Thrugelmir

userdefinable wrote: »

I did so online and completed the progress, it said someone would call. No one has and I have not received any emails from them. It's over a week since I did this.

Hmmm.

Probably received loads of applications. So working through them.

paulmapp8306

As always - depends on your own circumstances.

For instance, 1.99% is around 1% better than my current mortgage so on the face of it its great. However, with £50,000 outstanding that will only save me around £1000 over 2 years and the mortgage has £1k in fees so im actually no better off.

Now if it were a 5 year fixed deal, it it has a great follow on rate or if you have a larger (the bigger the better in this case) outstanding ballance then it becomes much more tempting.

Not making a point for or against the mortgage, or anyone i nparticular - just saying theres more to making decisions on mortgages than the advertised interest rate.

userdefinable

If borrowing a small amount (less than 100k) you may be better off with the fee free 2.99% HSBC with no early repayment charges (2.49% above base rate tracker). Need quite a low LTV though.