Are supermarket mortgage deals the future?

Mortgage deals could soon be on offer though UK supermarkets. Both Marks and Spencer and Tesco have announced their intention to join the UK mortgage market.

Firstly do UK home-owners want to buy through a supermarket or high street retailer, and secondly will the mortgage rates on offer be competitive?

For around 15 years supermarkets have offered credit cards and insurance, now it would appear they want to offer mortgages too. Tesco has announced its intention to offer mortgage products as soon as its banking licence is issued by the FSA, it is expected that this could happen after summer.

M&S recently announced its intention to offer mortgage deals starting in 2013, once its bank has been launched.

The fact mortgages are to be targeted by supermarkets should come as no surprise, offering mortgages is seen as a natural progression from offering current accounts and savings

Sainsbury’s were the first UK supermarket to launch a bank offering credit cards, loans and savings but so far it has said nothing about joining M&S and Tesco in offering mortgages. However the prediction is, where one leads the others will follow.

So will supermarket mortgage rates be competitive? Well this depends on access to affordable funding, and whether they will offer much competition to the top lenders remains to be seen.

One supermarket who successfully made the move into the mortgage market was the Co-operative, who started offering mortgages over 10 years ago.

The Co-op has since become a major player in the UK mortgage market. We will wait to see if Tesco and M&S can follow suit.

For a comparison of lenders most competitive mortgage rates contact Deal Direct today.