Tesco reduces its mortgage rates to make them more competitive.
Just a month after its mortgage range was launched, Tesco has announced that its mortgage rates are being cut.
Last month Tesco launched its mortgage range to a lukewarm response. Critics were not impressed with Tesco's mortgage terms or rates saying that they were not competitive in the wider market.
The fact Tesco said it would not lend above 80% loan to value was also not well received. A spokesperson for the lender advised that there was little demand in the market for such products, therefore it saw no need to launch smaller deposit mortgages.
Many first time buyers desperate to climb on the property ladder were surprised by this. While many buyers can meet monthly mortgage payments they are finding high deposit levels a struggle to save for. Any help is this area offers first time buyers the opportunity to climb on the property ladder which increases green shoots development in the housing market.
Other lenders such as NatWest and Santander competed for 'lowest ever' rates making Tesco's mortgage rates looked even less competitive.
Perhaps in response to criticism, perhaps to attract customers or perhaps in an attempt to compete against larger lenders, Tesco has take the decision to cut its mortgage rates.
A 2 year tracker for up to 70% loan to value is now available at 2.95% and a 2 year fixed rate for up to 70% loan to value is available at 2.99%.
While these rates are not the lowest available they are a move in the right direction.
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