Tesco has stopped selling home loans less than three years after it entered the trillion pound mortgage market, The Times has learned.

The supermarket giant has withdrawn its range of home loans, backed by First Active, a mortgage lending arm of the Royal Bank of Scotland, and replaced it with a mortgage broker service in a bid to win more market share.

Tesco shoppers wanting a mortgage will now be redirected to London & Country, the broker behind the new free service.

The move comes at a time when Tesco is gaining a foothold in the property market and in the increasingly lucrative price comparison sector. The chain last month confirmed it is set to re-launch its currently suspended property selling service as a full-blown estate agency. Tesco Personal Finance, the group’s financial services arm, launched Tescompare.com in September, a car insurance comparison website that searches quotes from Royal Bank of Scotland’s stable of brands, including Churchill and Direct Line.

Tesco said the broker service is more in-keeping with its aim to offer choice than an own-brand mortgage range. Experts estimate that between 65 and 80 per cent of mortgage business, worth a total £1.1 trillion, is now done through brokers.

Matthew Dransfield, of Tesco Personal Finance, said: “At Tesco, customers expect choice. For example, we do not just sell Tesco own-branded goods in store, we sell HP, Heinz and Crosse & Blackwell, so this whole of market advice service fits in.”

Andrew Montlake, a partner at Cobalt Capital, another mortgage broker, said: “This makes a lot of sense for Tesco. Teaming up with London & Country is much better than doing it themselves. Tesco is not an expert and selling one product by one provider is not the way to go nowadays as more and more people use brokers.”

Tesco originally began promoting its own-branded home loans in stores in November 2004. It began a six-month trial period with London & Country at the end of January.

Tesco denied that the withdrawal of its own-brand mortgages was because of the global credit crunch that has seen many lenders battening down the hatches to new business.

In the three years since launch, the supermarket only launched three mortgage deals to borrowers, a three-year tracker, a two year fixed rate and a two year tracker.

Mr Montlake says: “At the time they launched, their rates were not that bad, but now they are a little off the pace.”

Colin Robertson, head of cards and lending at Tesco Personal Finance, said: “ We developed the Tesco mortgage finder to act as a portal that our customers can use to get the best mortgage buys on the market. So we decided to partner for a trial to sell a variety of mortgages. The service is proving popular with customers and we will be led by their feedback for our plans going forward.”