If you have a mortgage with Tesco Bank then you need to read this

The low down on the upcoming changes for mortgage customers
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  • If you have a Tesco mortgage you might be feeling a little uneasy. In May this year, Tesco Bank announced that it was going to stop lending on new mortgages and planned to sell off its existing portfolio.

    Related: Will you pay off your mortgage before you are 65? This new research may surprise you…

    However, before you start to panic, Tesco Bank plans to move all of its mortgage customers over to Halifax by the end of this month.

    But if you are one of the more than 23,000 mortgage customers being switched from Tesco Bank to Halifax you might be wondering what this means for you. So we’re giving you the lowdown of what we know so far.

    Tesco mortgage

    When Tesco bank announced in May they said that there will be no changes to customer accounts and customers do not need to take any action.

    Tesco mortgage 1

    Image credit: Tesco

    Since announcing that the portfolio will be sold to Halifax, Tesco bank has confirmed that it will continue to provide a full service until 27th September. Until this date, you’ll be able to switch products, amend terms and apply for a payment holiday.

    If you put in a mortgage application with Tesco Bank before 24th May these will continue to be processed but must be completed by 14th December 2019.

    For customers with a fixed-rate mortgage, the existing agreed rate will be honoured by Halifax. So nothing will change until the end of your fixed period.

    Tracker mortgage customers can expect the rate to remain the same until the end of the tracker period. However, if the base rate changes during that time it might change.

    Standard variable rate customers will continue to be charged Tesco Bank’s standard variable rate. It is unclear how long this will be guaranteed for. But, Tesco Bank said customers would be contacted about any future changes.

    Tesco mortgage 2

    Image credit: Tesco

    Early exit frees, however, won’t be waived as a result of the move to Halifax.

    If customers have any further queries, Tesco Bank will initially continue to deal with customer enquiries, until they notify customers.

    ‘Our focus is on how we best serve Tesco customers and align our resources effectively to their needs while ensuring that our offer remains sustainable in the long term,’ says Gerry Mallon, Chief Executive Tesco Bank.

    Related: These lenders are now offering 15-year fixed rate mortgages

    If you have a mortgage with Tesco, while changes might be afoot, the current advice is just to keep calm and carry on.

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