Tesco Bank now offer UK mortgages.

Mortgages have just been launched by Tesco.

The new lender has announced the release of fixed rate mortgage deals from between 2 and 5 years and 2 year trackers.

However if you are a smaller deposit buyer you will need to look elsewhere as you will not be considered for a Tesco Bank mortgage.

A spokesperson for the lender has confirmed that the maximum loan to value that will be considered is 80%. Adding that its decision to not offer mortgages above this level is based on its market research. It believes amongst its potential customer base there is no demand for smaller deposit deals.

Tesco's decision may be short sighted as it will exclude many hopeful buyers. The lender however seems to have no intention of changing this policy as it advises it has no plans to release any additional mortgage deals.

If you are looking for a low deposit mortgage you are advised to call Deal Direct. One of our impartial advisers will search the entire UK mortgage market to find you an appropriate low rate offer.

If you have a deposit of 20% and above a rate is on offer at 3.99% fixed for 2 years, with a 25% deposit a 2 year fixed rate is offered at 3.59% and with a 30% deposit a rate of 3.19% is available.

Tesco Clubcard holders are to receive an additional benefit, for every £4 they repay on their Tesco mortgage they will have one point added to their card.

Critics say Tesco mortgages have not been competitively priced and therefore impact on the market is likely to be limited. Others advise that while this may be true, any increased market competition is of benefit to mortgage borrowers.

For the lenders best mortgage offers contact Deal Direct.