LloydsTSB is now offering its current account customers a 0.2 per cent reduction on its mortgage interest rates . The deal is available only to LloydsTSB current account customers who can fulfil two criteria, depositing one thousand pounds or more into their accounts every month, and taking out a new mortgage deal with the bank.

The offer could save its customers hundreds of pounds each year. For a regular fixed rate repayment mortgage that has been reduced by 0.2 per cent, current account customers would expect to make a saving of between two hundred and three hundred pounds, depending on the type of mortgage product purchased.

Stephen Noakes, who is head of mortgages at the bank, has said that Rewarding our current account customers by helping to reduce the costs of their mortgage payments is just one of the ways LloydsTSB will continue to deliver the best value mortgages and develop deeper relationships with our customers in these still challenging times.

The bank is also responding to calls for added flexibility in mortgage products to help future-proof mortgage commitments, and which can be adapted to changing needs, and have recently committed to extending the ability to overpay on mortgages.