Tesco Bank has announced that it is offering the cheapest mortgage in the UK at just 1.99%.
November 5, 2012 (Newswire.com) - Wilmslow, Cheshire Tesco Bank has announced that it is offering the cheapest mortgage in the UK at just 1.99%. This deal is available for those with a large deposit of 40% and as well as the low rate carries other great benefits such as one point for every £4 spent on repayments applied to the Tesco ClubCard, free valuation and fees included.
This is a great deal for those in a position to put down a good deposit, however many first time and second time buyers are struggling to get enough money together to put down 10 or 20% let alone 40%. This will do nothing to kickstart the mortgage industry and help those struggling to get a foot on the property ladder, but is a great deal for those in a position to take advantage of it.
The deal is fixed for two years and the typical borrower with a £200,000 mortgage will be over £3,000 better off each year as opposed to the average mortgage rate of 4.44%, which is an amazing saving.
Second cheapest is currently being offered by Santander, at 2.39%. However this carries a £1,995 fee.
The average house price in Britain is £163,376, which means that if someone buying a property at this price would need a deposit of £65,350 on this Tesco deal.
Tesco is in a position to offer this deal due to the Government's Funding for Lending scheme whereby it handed out £80bn to banks in order to help kick start the property industry. Critics have hit out at Tesco, saying that they should use this funding to help first time buyers and those with small deposits or a small amount of equity and wanting to move.
The deal is fixed for two years at 1.99% and then will change to the standard variable rate of 4.24% for the rest of the term, making it 4% overall.
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