Tesco Bank quietly entered the mortgage market back in 2014. I mentioned it briefly at the time but it turns out that I haven’t written about it for over four years.
(Part of the reason is that there are many factors to consider when taking out a mortgage. Whether or not you will earn Avios or Virgin Flying Club miles via Clubcard points should be very much at the bottom of your list of considerations!)
It is all very simple:
You earn 1 Tesco Clubcard point for every £4 of your monthly mortgage payment. This applies to both the capital and interest elements.
You earn 1 Tesco Clubcard point for every £4 of any overpayment you make, as long as it does not fully repay your mortgage
As a reminder, one Tesco Clubcard point converts into 2.4 Avios or 2.5 Virgin Flying Club miles. You can occasionally get a 10%-20% bonus on transfers to Virgin Atlantic, although Avios conversion bonuses are very rare.
This return would be pointless if the mortgages were badly priced. Tesco Bank has a good reputation although the need to compare interest rates, the fixed rate period, fees and maximum loan-to-value mean that there is no ‘one size fits all’ answer as to whether it is the best deal. At present it only appears to offer fixed rate mortgages covering two, three or five years.
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. 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 (September 2023)
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:
There are two official British Airways American Express cards with attractive sign-up bonuses:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
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.
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.
EDIT: Applications for this card are temporarily suspended due to IT issues with the British Airways On Business SME loyalty scheme.
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.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.