Tesco Bank, as a provider of new mortgages, has exited the UK market. While they were once a popular and competitive mainstream lender, they no longer offer mortgages to new customers.
In 2019, Tesco Bank made the decision to stop new mortgage lending and subsequently sold its entire existing mortgage portfolio (its "mortgage book") to Lloyds Banking Group, with the accounts being transferred to Halifax.
This article explains what this means for both new borrowers and existing Tesco Bank mortgage customers. If you were on a Tesco Bank mortgage deal and wish to compare the rate against the rest of the market, you can use our free mortgage sourcing tool below:
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Who were Tesco Bank?
Tesco Bank entered the mortgage market as a "supermarket bank," leveraging its massive brand recognition to offer a range of straightforward and competitive mortgage products. They were a popular choice for everyday borrowers, particularly first-time buyers and remortgagers, who were looking for good value from a trusted household name.
They operated as a classic high-street lender, competing directly with major banks and building societies.
What Happened to Tesco Bank Mortgages?
In 2019, Tesco Bank announced its withdrawal from the mortgage market, citing intense competition and challenging market conditions which made it difficult to generate sustainable returns. Following this decision, they sold their entire portfolio of over 23,000 mortgages to Halifax, which is part of Lloyds Banking Group, the UK's largest mortgage lender.
I'm an Existing Tesco Bank Mortgage Customer. What Does This Mean?
If you originally took out your mortgage with Tesco Bank, your account is now managed by Halifax.
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Your Deal is Unchanged: The interest rate and the terms and conditions of the mortgage deal you signed up for with Tesco Bank remain exactly the same until the initial period ends.
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Customer Service is from Halifax: All your annual statements, customer support, and any communication about your mortgage will now come from Halifax.
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Choosing a New Deal: When your current fixed or tracker rate with Tesco ends, you will be treated as a Halifax customer. You will be offered a "product transfer" to switch to a new mortgage deal from the Halifax range of products.
So, How Do I Apply for a "Tesco Bank" Mortgage?
You can no longer apply for a Tesco Bank mortgage. Instead, you would need to apply to another lender. If you were interested in Tesco because they were a major, competitive high-street name, then Halifax (the company that now manages Tesco's old book) would be a very similar alternative.
Halifax is a major UK lender known for:
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Being a huge player in the first-time buyer market.
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Offering a vast range of competitive mainstream rates.
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Having a large high-street presence and multiple application channels.
If you need independent advice about which lender to choose, make an enquiry here and we will connect you with a whole-of-market mortgage broker for a free consultation.
