A number of the state-funded banks are charging higher than average rates on their mortgage products, according to research from moneyfacts.co.uk.

Over the past 12 months, Cheltenham & Gloucester (C&G), Halifax and Northern Rock have consistently charged higher rates on their two-year fixed-rate mortgage deals than the rest of the market.

For a two-year fixed-rate mortgage at 75 per cent loan-to-value, the average rate across the whole of market stood at 4.19 per cent at the beginning of March, compared with 4.57 per cent from C&G, 4.37 per cent from Northern Rock and 4.27 per cent from Halifax.

“Many hoped that the state owned banks would be at the front of the queue for unlocking the mortgage market, but this isn’t the case,” said Michelle Slade of moneyfacts.co.uk.

But the research showed that Royal Bank of Scotland (RBS) has been more competitive.

The best deals were from RBS at 3.84 per cent, HSBC at 3.99 per cent and Woolwich at 4.06 per cent.

“Some state funded banks appear to place a higher priority on getting out of Government ownership, rather than helping with competitive rates the customers who supported them,” said Ms Slade.

“In the last year, only a handful of mortgage lenders actively promoted their products in order to increase their share of the market and it is these lenders that have come out well in our survey.”