Cheltenham & Gloucester and its parent firm Lloyds TSB are offering an offset mortgage, combining a C&G mortgage with a current account from Lloyds TSB.
The mortgage, savings and current accounts remain separate but the balances are offset to reduce the interest due on the mortgage. Customers carry on banking in exactly the same way.
A family and friends option allows parents or close friends to offset the savings that they have with Lloyds TSB or C&G against another person's mortgage.
Instead of more interest being paid on the savings, the mortgage holder pays less interest on their mortgage while the saver keeps complete control of their money.
The mortgage is a lifetime tracker at 0.9 per cent above the Bank of England base rate with interest calculated daily.
C&G managing director Jon Pain says: “We are drawing upon our strengths to get the best result for customers.”