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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.

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.  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.


How to earn Avios points from UK credit cards

How to earn Avios from UK credit cards (December 2021)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways BA Amex American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios:

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus:

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)

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.

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