The scheme will last for one year until 31 March 2011 and is designed to help brokers’ clients gain maximum advantage from the current low interest rate environment.

Because of the low rate environment, affordability has improved significantly and the amount of money which customers have at their disposal post tax has increased by 15% since Q4 2007.

Recent research conducted on behalf of LBG showed that around one in four consumers questioned are already choosing to overpay their mortgage.

The research also revealed that 63% of people would definitely consider overpaying or increasing their overpayment if they were given the chance to overpay by up to 20% without a penalty.

Of those consumers questioned who had already chosen to overpay, almost half (48%) said they were overpaying their mortgage to reduce the term of mortgage and under a quarter (22%) said they were overpaying to pay less interest over the term of the mortgage.

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Peter Curran, director of intermediary mortgages, LBG said: “Not only does this move help the majority of people to overpay their mortgage it is also the perfect opportunity for brokers to further build their relationships with Halifax, Lloyds TSB, C+G and Bank of Scotland clients.”

He added: “The average mortgage repayment has dropped by around £188 per month. And those on tracker mortgages have done even better – on average they are just over £400 a month better off. This will give brokers’ clients another choice to gain maximum advantage from the extra cash in their pocket.”