TSB Bank yesterday dropped the price of one of its mortgage products, offering first time buyers a new discounted variable rate of 5.5 per cent. The company said the new product applied to customers who borrow 80 per cent or more of the value of their house. TSB said it was maintaining its 4.9 per cent rate for customers who borrow less than 80 per cent of the house value.

"Today's interest rate adjustment is further evidence of TSB Bank's commitment to ensure that our customers benefit, as much as possible, from the current financial climate," said Mr Tony O'Connell, the bank's general manager for advances.

The company was particularly happy to assist fist first-time buyers who were experiencing difficulties as house prices continue to rise, he added.