The latest Mortgage Solutions People’s Poll asked whether the offer of Clubcard points and Tesco’s strong reputation would be enough for its products to take significant market share.
Of our respondents, six-in-ten (58%) said that the products would have great appeal to consumers, despite the mortgages initially only being offered direct to customers in store.
A further 28% said that Tesco would have to offer better rates if it was to make an impact on the market while 14% said that customers would never buy products like mortgages in the same way they do groceries.
Lea Karasavvas, director of Prolific mortgage finance, told Mortgage Solutions: “Tesco’s launch into the mortgage market is one that should be welcomed as every new lender brings with it the capability for the consumer to benefit from more competition.
“Whilst the rates are not market leading, it is a steady product mix they are offering and I would expect them to get stronger and stronger. Competition has definitely intensified in the mortgage market of late, and the launch of Tesco Bank mortgages will simply add to this.”
Terry McCutcheon, group chief executive of Finance Planning Group, added: “Our view as independent mortgage brokers is that it will always benefit the consumer when new brands come into the market, as it helps focus some of the larger existing lenders on maintaining competitive rates.
“While the Tesco product range is not world-beating in terms of rates, they do offer their customers the added benefits of ‘Clubcard points’, which may appeal to some shoppers.
“It seems that Tesco’s marketing is well-thought out and is focussed on attracting existing customers, who already shop at Tesco by adding another product to their extensive range.”
To see more industry reaction to Tesco’s mortgage launch, click HERE.
