Thousands of savers and borrowers with Catholic Building Society are being offered merger bonuses of between £100 and £500 in what could be the first of a series of windfalls from societies. The housing downturn is expected to trigger further mergers among the near-60 remaining mutual lenders.

The Catholic payouts, due to be detailed in a mailing to the 4,000 customers of the one-branch society in the next few days, are on offer as part of a proposed tie-up with Chelsea, the fifth largest society. The typical bonus for Catholic savers is expected to be £225 to £250, calculated on the average of their balances on 31 May and 31 December this year. The Catholic's near-400 mortgage borrowers are being offered flat-rate payments of £100.