Earning Clubcard points and Avios from a Tesco mortgage

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (www.shopperpoints.co.uk), which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

Tesco quietly entered the mortgage market this year. I only mentioned it briefly at the time, but as the product is now better established it is worth taking a look.

(Clearly, there are many factors to consider when taking out a mortgage.  Whether or not you will earn Clubcard points should be bottom of your list of considerations!)

The Tesco Mortgages home page with all the headline financial and regulatory detail is here.  More interesting is the page on Clubcard earning which is here.

It is all very simple:

You earn 1 point for every £4 of your monthly mortgage payment.  This applies to both the capital and interest elements.

You earn 1 point for every £4 of any overpayment you make, as long as it does not fully repay your mortgage

This return would be pointless if the mortgages were badly priced.  At the moment, Tesco is competitive.  I did a trawl on MoneySuperMarket a week ago (which, admittedly, is not unbiased because some lenders are not featured).  For a remortgage, ranking by ‘lowest initial rate’, Tesco was No 2 at 1.5%.  HSBC, which was first, was 1.49% but for a slightly shorter period.

If you were making monthly payments of £1000 you would be earning 250 Clubcard points.  This is worth 600 Avios, so about £5-£6 of value.  It is not enough to move the needle on which mortgage provider is cheapest.

However, that said, Tesco does appear to have a competitive product and it is worth taking a look alongside other providers.

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (www.shopperpoints.co.uk), which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?