May 24, 2019
Q&A: Tesco checks out of mortgage market
Borrowers with Tesco Bank this week learnt it would be pulling out of the UK mortgage market, blaming "Challenging market conditions". The retailer's banking arm is exploring a sale of its £3.7bn mortgage loan book, with about 23,000 borrowers, against a background of intense competition on mortgage rates and tightening margins across the industry. What about the Clubcard points? Tesco currently offers customers with its supermarket loyalty card one Clubcard point for every £4 they repay - a perk that will end when the mortgage book is sold. Will Tesco's decision have a wider impact on the mortgage market? Tesco is a relatively small player in the UK mortgage market, with 0.2 per cent of total mortgages outstanding, according to 2017 figures published by industry body UK Finance. You could ultimately find your switching options limited, whether Tesco sells its mortgage book to a high street lender or a group that is unable to write new mortgages.
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