Earlier this week, the government owned Northern Rock bank reduced interest rates on several of its mortgage deals, the largest reduction being 0.64 per cent.

As a result, the bank had three mortgage products in the best buy tables.

In fixed rate deals, the bank has a two year fixed rate of 3.65 per cent offered on those wanting mortgages of up to 70 per cent loan to value and a five year fixed rate at 4.99 per cent.

Northern Rock also has a two year tracker mortgage deal at 2.19 per cent over the base rate.

Plus, in addition to the interest rate reductions, the bank has brought eight new mortgages onto the market for those with a 20 per cent deposit with promises of up to £4 billion in mortgage loans in the remainder of 2009 and up to £10 billion next year.

These reductions and promises are good indications not only of further increased competition in the home market for mortgages but also good news for those borrowers currently with Northern Rock coming up to remortgage with less equity in their homes.

Other banks that reduced their interest rates in October this year include the Cheltenham & Gloucester, Nationwide, Woolwich and the Abbey.

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