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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 from UK credit cards

How to earn Avios from UK credit cards (February 2024)

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

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

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

British Airways American Express Premium Plus

25,000 Avios and the famous annual 2-4-1 voucher Read our full review

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

American Express Preferred Rewards Gold

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

The Platinum Card from American Express

40,000 bonus points and a huge range of valuable 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

Get a 10,000 points bonus plus an extra 500 points for our readers 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

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

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

American Express Business Platinum

Crazy 120,000 points bonus (to 9th April) and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

Huge 60,000 points sign-up bonus (until 9th April) and free for a year 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.

Comments (13)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • 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.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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