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Earning Clubcard points and Avios from a Tesco mortgage

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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.

Tesco Bank

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 (, which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

Comments (13)

  • Danny says:

    I wondered about their current account and debit card… I send circa 3k to the tax man each month and 3k VAT each quarter. .. 48k in total… meaning 5’100 clubcard a year via HMRC billpay.. other peoples thoughts?

    • Rob says:

      Finance transactions are blocked from earning points. Take a look at my post and the comments on the current account. Which is a shame, I agree!

  • Max says:

    No matter how good the deal I could not bring myself to get my mortgage from Tesco. The idea just doesn’t sit well with me.

    • Erico1875 says:

      If a low rate and club card points dont sit too well with you , I can thoroughly recommend 4.79% variable and poor service from Santander as an alternative.

  • Charlie says:

    I took one out but of course not for the clubcard points, but because they had the cheapest combination of initial rate and initial fees. I also had a HSBC mortgage for many years and that set the benchmark for me. It was a lot more effort with the Tesco one, for example I had to telephone to chase things like mortgage offer letters not being received (partly my fault because I needed another copy, then rates were lowered so I obviously asked to move to the lower rate, etc). My clubcard points didn’t always get posted but like everything else they do sort it in the end after chasing.

  • Craig says:

    How about taking out a mortgage you don’t really need, then repaying it in a few overpayments (that don’t quite take it down to zero)? Or over-sizing the mortgage even though you might have a lot of equity coming from a prior home…

    On a 200k mortgage, that would be 50k clubcard points or 120k avios… For the cost of whatever fees are charged up front.

    • Rob says:

      Nice idea but I can’t see many takers! That said, anyone moving should pay down to £1 to get the points on the overpayment.

    • RIccati says:

      1.2M Avios, not 120k?

      • N says:

        120k by my calculations. Except you’d hit the 30k Clubcard point limit if done in one quarter

        • RIccati says:

          Indeed 50000/250*600 = just 120k Avios

          Unimpressive as it takes months to process a mortgage and having one opened mortgage account (even with a minor balance) is likely be a major hurdle in getting ‘a real’ second mortgage account.

  • Mark2 says:

    I am amazed to see that Tesco are lending money at 1.5% when they are borrowing from us at 2.05% (but no Club Card points).

    • RIccati says:

      No doubt the high arrangement and service fees compensate for the extra low rate given for initial few years. On average across mortgages, it must be profitable.