TSB is introducing two new home loan products from Monday in a drive to increase its share of the mortgage market.

One product will offer a variable interest rate of 4.9 per cent for one year - one percentage point lower than TSB's current first year discounted mortgage. It is aimed at house buyers who are borrowing less than 80 per cent of the value of the house. The annualised percentage rate on the product is 7.1 per cent and the cost per £1,000 borrowed is £6.54.

The other product is aimed at encouraging people who want large mortgages to consider TSB. It is based on the Budget changes in stamp duty. TSB will pay the difference between the house buyer's stamp duty bill under the old and new rules in proportion to the size of the mortgage taken out with the bank.

For example, TSB would pay £3,000 of the stamp duty of a customer buying a house for £200,000 and taking a £100,000 loan who would face an additional stamp duty bill of £6,000.

The only condition, according to TSB general manager for advances Mr Tony O'Connell, is that the customer keeps the mortgage for a minimum of five years.

TSB chief executive Mr Harry Lorton said the new products will not be subsidised by existing TSB mortgage holders.