UK: Supermarket launches 90 per cent LVR mortgages

The products include a range of two-year, three-year and five-year fixed rate mortgages with rates starting from 3.49 per cent.

The flexible loans allow borrowers to make regular or lump sum overpayments of up to 20 per cent of the outstanding balance each year during the initial rate period, without having to pay an early repayment charge.

“Tesco Bank mortgages have a unique customer offering with their mix of rewards and competitive rates,” Tesco Bank managing director David McCreadie said.

“The extension of our range into the 90 per cent LVR market will allow us to help many more people make one of the most important purchases of their lives,” he said.

“We are helping more and more customers everyday with their banking needs and we have now lent more than £1 billion to our mortgage customers.”

Tesco Bank has been operating since 1997 and expanded into mortgages in 2012.

Richard Wormald, a former Tesco executive who was involved with Tesco’s transition into the mortgage space, is now the general manager of financial services at Coles.

It is understood that Coles, under Mr Wormald’s direction, has recently engaged a third-party distribution specialist to evaluate plans for the supermarket to begin distributing residential mortgages.