Nationwide are stepping up the mortgage price war by offering consumers a pay out of £150 if they cannot lower their monthly repayments.

The deal applies to seven named lenders: Halifax, Abbey, C&G, Woolwich, HSBC, NatWest and Northern Rock.

Homeowners looking to re-mortgage are encouraged to take the challenge and see if Nationwide can lower their monthly premiums with either a fixed or tracker rate deal.

If Nationwide can not, then the customer will get £150.

Nationwide executive director Stuart Bernau, said: "In a mortgage price war, the winners are those who look for a competitive rate with low fees and charges and a lender who treats them fairly at the end of the deal - with Nationwide, you don't have to sacrifice one for the other. The losers are the borrowers who continue to pay over the odds by remaining on some lenders' uncompetitive standard variable rates.

"With savings of up to £1,500 a year to be made on a £100,000 mortgage, we're confident our new mortgage challenge will lead many people to look at their mortgage and do something about it."