A new range of tracker mortgages has been introduced to the market by Alliance & Leicester with rates starting at 3.49 per cent.

The bank has also cut the rate on its three-year fixed-rate mortgages from 5.49 per cent to 4.99 per cent and has slashed interest on the five-year fixed-rate deal from 5.49 per cent to 5.29 per cent.

Both come with a £599 fee, however there are also fixed-rate deals available which come without this additional payment.

Richard Taylor, head of mortgages at Alliance & Leicester, said it was expanding its mortgage portfolio in a move which proved the bank was looking for new business in 2009.

He added: “We have moved into the New Year with a great set of deals, six of which are under four per cent.

“We are also now offering all remortgage customers a variety of options to help them choose the right deal for them.”