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23,000 Tesco Bank mortgages to be transferred to Halifax: what customers need to know

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Thousands of Tesco Bank customers will have their mortgage transferred to Lloyds Banking Group after the retail giant sold its entire back book in a deal worth £3.8bn.

The move will affect more than 23,000 Tesco mortgage customers, who will be transferred to Halifax, a division of Bank of Scotland, which is a wholly owned subsidiary of Lloyds Banking Group.

Customers are expected to be moved by the end of September 2019.

Tesco said the sale was in line with its strategy of focusing on a reduced number of products and services to reduce operating and funding costs.

Proceeds from the sale will be used to reinvest in the business, to fund ongoing transformation and to re-balance retail and wholesale funding sources.

Gerry Mallon, chief executive of Tesco Bank, said: “After a thorough process, we are pleased to confirm that we have agreed the sale of our mortgage book to Lloyds Banking Group, operating under the Halifax brand. We are confident that they will continue to provide our customers with an excellent customer experience.”

Tesco Bank stopping new mortgage lending in May.

What customers need to know

Tesco customers do not need to do anything. They will receive a letter soon making them aware of the change in ownership.

They will remain on their existing terms for the duration of their deal – so Tesco standard variable rate (SVR) customers will still stay on Tesco’s SVR. When the deal ends, they’ll be able to move to Halifax terms if they wish.

If customers want to move before the transfer, they can do but they’ll have to pay any applicable early repayment charges.

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