Tesco Bank sells mortgages to Halifax – here's what you need to know
More than 23,000 mortgage customers will be switched from Tesco Bank to Halifax, after the firm decided to sell its entire mortgage portfolio.
Tesco Bank plans to have moved all of its mortgage customers over to Halifax by the end of September, but will initially continue to deal with customer enquiries after this point. It's not yet clear when Halifax, which is part of Lloyds Banking Group, will take over dealing with customer queries, but Tesco Bank says it will keep customers up to date.
In May this year, Tesco Bank announced it would stop lending on new mortgages and said it planned to sell off its existing portfolio. At the time, MoneySavingExpert.com warned that this should not result in any existing customer becoming a mortgage prisoner – see our blog for more on our mortgage prisoners campaign.
See our Mortgages and Homes guides for more information and our best buy tools.
I have a mortgage with Tesco Bank – what does this mean for me?
Tesco Bank says it will provide a full service until Friday 27 September, so you'll be able to make changes such as switching products, amending terms or applying for a payment holiday with it until this date. It will also continue to process any mortgage applications made before 24 May 2019, but they must be completed by 14 December 2019.
Here's what will happen depending on the type of mortgage you have:
- Fixed-rate mortgage customers. Nothing will change until the end of your fixed period – as the existing agreed rate will be honoured by Halifax.
- Tracker mortgage customers. The rate will remain the same until the end of the tracker period – unless the base rate changes during that time.
- Standard variable rate customers. Customers will continue to be charged Tesco Bank's standard variable rate. We asked Tesco Bank to confirm how long it could guarantee this for, and it simply said customers would be contacted about any future changes.
Tesco Bank has confirmed early exit fees won't be waived as a result of the move to Halifax.
We've asked both Halifax and Tesco Bank if current Tesco Bank customers will be able to switch to other Halifax products, without undertaking a new affordability assessment, and will update this story when we hear back.
See Tesco Bank's FAQs or call 0345 217 2050 for more information.
Will I still be able to collect Clubcard points?
If you've registered your Clubcard to your mortgage account and you haven't paid off your loan in full before Friday 27 September, you'll collect Clubcard points until then. After that, you won't be able to collect any points on mortgage repayments.
However, Tesco has said it will give its mortgage customers a one-off 'gift' of Clubcard points. How many points you get will depend on the type of mortgage you have taken out.
For fixed-rate and tracker-rate customers, the number of points you'll get will be based on the Clubcard points you would earn on your contractual monthly payments until the end of your fixed or tracker term. Existing standard variable rate customers will receive a year's worth of points based on your current monthly payments.
What does Tesco Bank say?
Tesco Bank chief executive Gerry Mallon said: "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. As a result, we made the decision to move away from our mortgage offering."