Nationwide: A cheaper mortgage or £150

Nationwide has declared war on other lenders, offering to lower your mortgage payments or hand you £150.

Hostilities in the mortgage war have been stepped up by the move - with Nationwide challenging Halifax, Abbey, C&G, Woolwich, HSBC, NatWest and Northern Rock to open battle.

"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," said Stuart Bernau, Nationwide executive director.

The mortgage war erupted in July, with lenders competing to undercut each other on fixed rate deals as they expected the Bank of England to cut rates (full story ).

Since then first direct undercut the rest of the market with a 2.99 per cent discounted rate mortgage (full story), and now Nationwide has entered the fray.

Nationwide claims it can lower the mortgage cost of customers of any of the seven lenders named - and will hand them cash if this is not the case.

It also names who it sees as the winners and losers of this mortgage war.

The winners are people who reach the end of one deal and switch to another; those currently on a standard variable rate (SVR) who move to a better deal; and those on a high SVR who move to a better standard rate.

The losers in the mortgage price war include borrowers who have come to the end of a mortgage deal and stay on a high SVR and borrowers already paying a high SVR who do nothing.

Nationwide calculates that a Halifax customer with a £100,000 mortgage - currently paying the bank's SVR of 6.50 per cent - could save £1,500 a year by moving to Nationwide's two year fixed-rate mortgage.

Additionally, borrowers with a £100,000 mortgage could save more than £11,000 over the lifetime of their mortgage, or about £450 a year by switching from a 6.50 per cent SVR to Nationwide's 5.89 per cent Base Mortgage Rate.

However, they may struggle to convince HSBC customers of the value of this with the bank offering a lifetime tracker at 5.5 per cent and guaranteed to be within one per cent of the Bank of England's base rate for the lifetime of the loan.

"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," Mr Bernau concluded.

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