Tesco Bank will no longer offer mortgages - here’s what it means for existing customers
Tesco Bank will stop offering their mortgage lending service, blaming "challenging market conditions" for its decision to pull out of the market.
The bank first started offering mortgages in 2012 and has more than 23,000 existing customers, with outstanding lending balances amounting to £3.7bn.
The bank has now stopped all new mortgage lending and is looking to sell its existing portfolio.
Tesco Bank chief Gerry Mallon blamed difficult market conditions for the withdrawal, with the bank having already axed its travel insurance business at the end of 2018.
He said, "In recent years, challenging market conditions have limited profitable growth opportunities.
"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.
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"To that end, we have made the strategic decision to focus on serving a broader range of customers in more specific areas, which means moving away from our mortgage offer.
"We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio.
"Our priority in any sale is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well."
Tesco said there will be no impact on customers who already have a mortgage with the bank (Photo: Shuterstock)
What does it mean for customers?
Tesco said there will be no impact on those who already have a mortgage with the bank, and customers do not need to take any action.
However, it added that if a sale does go ahead, customers will be notified of any impact this will have on their accounts. Any possible sale would involve the transfer of all accounts and balances to the new provider.