Apparently, this applies a policy already run by parent company Santander on its own current accounts, but will certainly be welcome news for some none-the-less:

Alliance & Leicester £100 cash bonus

They bonus will be handed out to all new customers on their Premier Current Account. As well as this, they are offering free annual European travel insurance plus an interest free overdraft for 12 months.

The account also has an in-credit interest rate of 0.5% on balances up to £2,500 (but only 0.1% above this), which is relatively high compared to many other current accounts, the vast majority of which do not offer any interest.

LloydsTSB current account customers who take advantage of this offer could save hundreds of pounds per year on their mortgage.

In the first year alone, on a 3.99% fixed rate repayment mortgage of £150,000, reduced to 3.79%, LloydsTSB current account customers could save £197, and within two years the customer could therefore save £395.

On a 3.99% interest only payment mortgage of £150,000, reduced to 3.79%, a LloydsTSB current account customer could save £301 in the first year, and within two years the customer could save £603.

This benefit complements LloydsTSB’s wide range of flexible features for its mortgage customers – homemovers, remortgage and first time buyers – enabling borrowers different options that will ensure their mortgage supports them during any potential change or transition periods.

Stephen Noakes, head of mortgages at LloydsTSB, said: “Rewarding our current account customers by helping to reduce the costs of their mortgage payments is just one of the ways LloydsTSB will continue to deliver the best value mortgages and develop deeper relationships with our customers in these still challenging times.”

“Increasingly, we have also heard from our customers of their desire for added flexibility in mortgage products to help future-proofing mortgage commitments, which can be adapted and suited to their every changing need. Our recent commitments on extending the ability to overpay is just one component of our flexible benefits.”

To take advantage of this deal, customers can make an application in branch or over the phone.

The Lloyds Group this week offered a special incentive to current account holders – an extra 0.2% off their Lloyds mortgage rates.

However, the incentive only applies to those putting more than £1,000 each month into their Lloyds current account, which seems especially restrictive.

More: Lloyds TSB offers cheaper mortgage for current account holders

[A] current account customer with a typical £150,000 mortgage could save roughly £200 a year on a fixed rate deal, as the rate they are charged would reduce from 3.99% to 3.79%.

Stephen Noakes, head of mortgages, said:

“Rewarding our current account customers by helping to reduce the costs of their mortgage payments is just one of the ways we are developing deeper relationships with our customers in these still challenging times.”