Tesco Bank offers sub 2 per cent mortgage

Tesco Bank has lowered its two-year fixed rate mortgage to a headline hitting 1.99 per cent, it was previously 2.64 per cent.

It has also lowered the fee on its two-year fix to £800 from £1,100 but to take advantage of this product borrowers need to have a 40 per cent deposit.

If borrowers have a 30 per cent deposit the rate is now 2.39 per cent, down from 2.79 per cent.

Benny Higgins, chief executive of Tesco Bank, said the government and Bank of England Funding for Lending Scheme had enabled the bank to lower its rates on these two products. The rest of its mortgage range is unchanged.

Higgins commented: “We welcome the Funding for Lending Scheme, and are delighted to be able to pass on the benefit to our customers. We are committed to responsible lending and hope to enable our customers to borrow a further £1 billion, over the next year, at affordable rates.”