Nationwide has promised customers savings of over a thousand pounds on their mortgage, or it will give them £150.
The mortgage provider has said that it "can't be beaten" and has vowed to match or lower mortgage payments quoted by the seven biggest mortgage lenders including Halifax, Abbey, Woolwich, HSBC and Northern Rock, who account for half of the mortgage market.
Nationwide executive director, Stuart Bernau, said: "In a mortgage price war, the winners are those who look for a competitive rate with low fees, and charges and a lender who treats them fairly at the end of the deal - with Nationwide, you don't have to sacrifice one for the other.
"With savings of up to £1,500 a year to be made on a £100,000 mortgage, we're confident our new mortgage challenge will lead many people to look at their mortgage and do something about it."
Nationwide's mortagage challenge is not just open to first-time buyers, but remortgagers and those on a high standard variable rate (SVR) who are looking for a better deal.
According to new statistics from the British Bankers' Association there were almost 195,000 mortgage approvals in August, totaling a massive £18.3 billion.
The survey revealed that the average mortgage approval for a house purchase last month was £130,500.To read more about Homeowner Loans, click here.
© Adfero Ltd