Tesco Bank has today pulled its entire range of mortgage products and announced plans to sell its existing home loans to another provider.
This news is sure to spark concern among the retailer's 23,000 mortgage customers, who collectively borrow a whopping £3.7bn.
Here, we explain why Tesco is pulling out of the mortgage market and offer advice on what the future holds for homeowners with a Tesco Bank mortgage.
Tesco has offered mortgages since 2012, but that's come to an abrupt halt this morning.
Not anymore. The retailer has today said that 'challenging market conditions' have limited its growth opportunities, meaning it needs to pull out of offering home loans for good.
In a statement, Tesco Bank's CEO Gary Mallon said: 'We have made the strategic decision to focus on serving a broader range of customers in more specific areas, which means moving away from our mortgage offer.
'We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio.'
Tesco says that it wants to sell its mortgage book to a provider who 'will continue to serve our customers well', but has stressed that there's no guarantee of a successful sale.
The lender says that existing customers will be informed as and when a sale is completed, and in the meantime, borrowers don't need to worry or take any action, as their home loans will continue on the terms originally agreed.
Existing Tesco Bank mortgage customers can contact the lender on 0345 051 8461 if they have questions.
And don't worry if you've still got some months to go until the end of your introductory deal period, as in many cases it's possible to agree a new mortgage six months before the end of your fixed term.
While today's news primarily affects Tesco's existing customers, it could also be bad news for prospective borrowers - especially first-time buyers.
In truth, cashback has been the biggest attraction of a Tesco mortgage for some time, as while the supermarket's deals were competitive, they weren't chart-topping when it came to rates.
Based on Moneyfacts data from last week, Tesco two-year fixed rates at 90% and 95% LTV were both around 0.25% more expensive than the market-leading rate.
If you have a Tesco Bank mortgage and want advice on your options, or you just want to remortgage to get a better rate, it can help to speak to an expert.
A whole-of-market mortgage broker can make an expert recommendation on the best option for you.