Tesco Bank is reducing the rates on four of its fixed-rate and tracker mortgage products this week, whether customers are re-mortgaging or buying a new home.
The banking arm of the supermarket giant only moved into the mortgage market at the beginning of last month.
But it is already chopping the rate on its five-year fixed rate with a 70 per cent loan-to-value (LTV) by 0.5 per cent, from 3.89 per cent to 3.39 per cent. Its three-year fixed rate, also at the same LTV, has been slashed by 0.41 per cent from 3.69 per cent to 3.28 per cent, while its two-year deal has dropped 0.2 per cent to 2.99 per cent. Andrew Hagger, independent personal finance analyst at Moneycomms, says the rate cut now makes the mortgage products 'a hit'.
He said: "When Tesco Bank announced details of its first ever range of mortgage products on 6 August it was met with a rather lukewarm response with many giving the thumbs down as the rates were deemed to be uncompetitive. Today the supermarket banking giant shows it means business and has hit back with some hefty price reductions, pushing some of the new deals towards the top of the best buys."