Tesco Bank mortgages sold to Lloyds Banking Group
Lloyds Banking Group has bought Tesco Bank’s book of more than 23,000 mortgages for £3.8bn.
Tesco Bank stopped new lending earlier this year and an All-Party Parliamentary Group called on the lender to find a new buyer for its existing mortgages so that those borrowers would have more options when it came to switching deal.
But what are those options?
What next for Tesco borrowers?
Lloyds will place the Tesco borrowers under its Halifax brand – under the same rate and terms they are on now – and allow them to move to Halifax terms when their existing deal expires.
Gerry Mallon, chief executive of Tesco Bank, said: “Our priority has been to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.
“After a thorough process, we are pleased to confirm that we have agreed the sale of our mortgage book to Lloyds Banking Group, operating under the Halifax brand. We are confident that they will continue to provide our customers with an excellent customer experience,” he said.
Under the terms of the deal, customers will be transferred to Halifax and should see no immediate change to their current rate or mortgage term.
But the news could still spark concern for the affected customers and what this may mean for their mortgage, said Mark Gordon, director of mortgages at comparethemarket.com.
He added: “It may be worth some of those customers considering refinancing options as the savings could be significant. By shopping around, customers are more likely to find a competitive deal elsewhere – especially as mortgage rates are now very good value.
“Equally, for those on a standard variable rate, this is an opportunity to switch to a fixed deal which are often far more competitively priced.”