Are Tesco "product switches" likely to be better or worse than new mortgage offers?

nelbows

Hello,

Our Tesco 2-year fixed rate is coming to an end in 2 months. They say they'll send me details of a potential 'product switch', so I could move to a more advantageous rate than the SVR.
But they can't send me any information about the "retention campaign" or rates right now.

Thing is, I'm about to have a baby and doubt I'll have much time or brain for researching and arranging alternative offers in January (First Direct are currently offering 1.09%, much nicer than Tesco's publicly available online offer of 1.24% for 2-year fixeds).

Does anyone know if retention campaigns or product switches are USUALLY better or worse than the rates that are advertised online? I realise it's hard to know, but just want a sense of whether I should be starting my research now, or relying on Tesco to provide a good offer.

Have had a scout around and can't find existing answers to this question, so hope this a sensible thing to ask!

Thanks in advance for any thoughts
N

muhandis

Congrats and good luck!

I'm not sure there is a 'usually' answer. On these forums I have seen both - for instance Nationwide offering deals that are better than what they give to new clients and Santander offering retention rates that are worse.

But in any case lenders usually try to sell a switch at least 3 months in advance, to catch you before your broker gives you a call for a remortgage. So I'm surprised that Tesco have left it so late.

If you are indeed getting much better rates (and it works out better overall considering fees, etc), you might want to consider applying for a remo now and lining up completion for when your fix ends.

nelbows wrote: »

Does anyone know if retention campaigns or product switches are USUALLY better or worse than the rates that are advertised online?
N

AnotherJoe

Any reason you cant line up the FD deal now (seems pretty good to me) and then if inertia and baby make it too difficult, stick with that, or if you have a few minutes at 3am one night between feeds (congrats BTW!) see what Tesco have and go with them.

When do you have to pay a fee to FD to hold the deal?

nelbows

Thanks for the tips! So, sounds like it's probably worth just doing the research now and lining up an option. MSE comparisons here we go.... :-)

kingstreet

What are HSBC/First Direct's requirements for maternity leave/childcare if you do remortgage?

I know some lenders are a real PITA on stuff like that.

dimbo61

The FD might be a cheaper rate but how much will it cost to change lenders ?
You would also have to have a full mortgage application while on mat leave !
How long do you plan on staying in your home ? How happy are you with your current home ?
How safe is your job or your partners ? Pay rises, pensions, savings, overpaying, kid/S !!!!
You may be able to sign up a new deal with Tesco online without any credit checks and very little paperwork.
Consider carefully if 2 years is long enough ! A 5 year fix would see your child at school before you need to remortgage

nelbows

Good points! Will look at a 5 year fix, and double check that, between me and my other half, we are still eligible for the amount we need. Thanks.