Last year the supermarket giant revealed ambitious plans to lend £1bn at ‘affordable rates’ during 2013, but, according to John Charcol’s senior technical manager Ray Boulger, the lender will have to offer its products in more ways to reach such a figure.

Tesco currently offers mortgages through its telephony team and online via the Tesco Bank website.

“The problem for Tesco now is that they either need to expand their distribution or squash their margins to the bone,” Boulger told Your Mortgage’s sister title Mortgage Solutions.

“Unless they’re able to offer cutting edge rates all the time then the lending targets they have set are not going to happen. The 1.99% deal they launched at the end of last year had to be withdrawn after a month.”

Boulger added that he expected Tesco Bank to begin using the intermediary channel in the near future.

“I would expect them to launch products through brokers, possibly in the first half of this year.

“We see that virtually no mortgages are sold online because there is always a point in the process where people need to ask for more information, so the MMR poses a serious challenge for Tesco and I can’t see them continuing to expand without opening up to the broker market.”

A Tesco Bank spokesperson refused to comment on the speculation and said the lender was not making its future plans public.

“We are pleased with the progress we’ve made in the market in a relatively short period of time, but we won’t be discussing our future plans for this product or any other products at this time.”