Sainsbury’s Bank has re-entered the mortgage market, offering a range of loans with interest rates starting from 1.34%.
The supermarket giant has not offered mortgages since 2004 but announced its desire to return to the market last year.
Sainsbury’s Bank mortgages will initially be available over the phone and through mortgage brokers, with an online application system being launched later this year. The range is initially restricted to mortgages and remortgages, but Sainsbury’s plans to offer buy-to-let loans in future.
Its headline products include a two-year fix on offer at 1.34% - although there are currently cheaper products available elsewhere. This deal is available to borrowers with a 25% deposit and comes with a £995 fee.
The rest of the range includes more two-year fixes, fee-free loans, variable rate mortgages and five-year fixed deals. Applications will be considered from customers aged up to 70, with products targeted at self-employed people and first-time buyers.
Mortgages will be offered on properties across the UK and its standard variable rate is currently 3.99%, although this can change at any point.
Sainsbury’s joins fellow supermarket Tesco in the mortgage market. Like Tesco Bank, it will offer borrowers reward points meaning they can earn up to £200 a year in vouchers to spend in-store – although these rewards are limited to the first two years of taking out a mortgage.
‘The mortgages are not to be sniffed at’
Catherine More, head of mortgages at Sainsbury’s Bank, says: “Mortgages and grocery shopping are some of our customers’ biggest household expenditures and we’re uniquely placed to help them out with both.
“We’ve built our new mortgages in response to our customers’ needs, they told us they wanted to feel supported through the whole process, that they wanted the flexibility to pick the advice that suits them, and to receive a good deal.”
Andrew Hagger of Moneycomms adds: “It is good to see a provider entering the mortgage market with such a competitively priced range of products across the full range of loan-to-values (LTVs).
“The added bonus of a shopper reward is an innovative move that makes the deal even more appealing for Sainsbury’s shoppers – the option to earn up to £400 vouchers off shopping over two years is not to be sniffed at.”