'So that will be four litres of milk, a loaf of bread ... and a mortgage. Have you got a Tesco Clubcard, sir?'
Supermarket giant Tesco continued its diversification strategy with the launch on Monday, August 6th, of a mortgage service ... and, yes, Tesco will be offering Clubcard points, not at the time the mortgage is granted, but each month when repayments are made.
Tesco said Clubcard holders would receive one Clubcard point for every £4 on their monthly mortgage repayments.
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Benny Higgins, Chief Executive of Tesco Bank, commented: "Entering the mortgage market is a significant step in broadening the products we offer to Tesco customers."
Philip Clarke, Chief Executive of Tesco, described the launch of Tesco Bank mortgages as "a major milestone towards offering Tesco customers a full retail banking service."
Tesco may have lost its golden touch in its core grocery business of late, and not all attempts to diversify (such as its discontinued second-hand car sales venture) have paid off, but when it gets it right, its entry into a new market can have a disruptive effect, as the difficulty Argos is having competing with Tesco Direct testifies.
Andrew Hagger of personal finance web site Moneynet welcomed Tesco Bank's entry into the mortgage market, saying consumers should benefit from heightened competition in the mortgage sector.
"Tesco Bank already has a solid reputation for good value personal finance products, frequently appearing towards the top of the best buy tables in the savings, personal loan and credit card markets," Hagger said.
The Tesco Bank mortgage product range includes two, three and five-year fixed rate mortgages, and a two-year base rate tracker. The products will be available online or over the phone. There are currently no plans to make the mortgages available through mortgage brokers, a Tesco spokesman told mortgages-focused web site Mortgage Strategy.
JH
