Tesco Bank has just launched a new two-year fixed rate mortgage priced at 3.89% until 31.1.18. This deal is for all applicants who borrow from £40,000 at 95% loan-to-value (LTV). A fee of £495 is payable, of which £300 can added to the advance of the mortgage. An incentive package for remortgage customers of free valuation and free legal fees is also offered.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“Tesco Bank is putting its stamp on the high-LTV market with this new mortgage, which sits just shy of the current market-leader. Not only does this deal offer a low rate, but it also has a low fee, making this product an attractive, cost-effective option for borrowers with a modest deposit.

“This offer is announced as the Help to Buy mortgage guarantee scheme celebrates its second birthday. Its launch revived the 95% LTV market, with the number of products increasing from 42 when the scheme began two years ago to 244 today. In that time the average two-year fixed rate mortgage at 95% LTV has decreased from 5.05% to 4.39%.

“With more choice on the market, borrowers need to avoid being sucked in by the branding of the Help to Buy scheme. As this latest launch shows, there are highly competitive, cost-effective deals offered outside of the scheme, which means borrowers could now find better deals elsewhere.”

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Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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