THE prospect of a mortgage price war may tempt many home owners to consider re-mortgaging for a better deal.

Although, with more than 150 mortgage lenders to choose from and dozens of different types on offer, it can seem easier to stay with your existing bank or building society.

However, according to Craig Armstrong, financial services manager at Gordon Brown Associates, in Chester-le-Street, County Durham, it is always worth shopping around.

Offers to look for include deals with no redemption charges and flexibility to pay less on your mortgage whenever you need to.

If the mortgage battle goes to an all-out price war, some of the smaller lenders are likely to attract borrowers with offers of free legal fees and surveys, said Mr Armstrong.

"The other things to look out for are the arrangement fees. People should be asking how much it's going to cost them to remortgage," he said.

"They need to make sure that they see how the interest is calculated, whether it's daily - which would be best - or annually.

"Other incentives include cash-backs. Someone who is quite happy to pay their existing lender's variable rate could switch to another lender's variable rate and get eight per cent cash back."

Mortgage shoppers should also look for deals that are going to last and have no extended tie-in period.

"If you're going for a three-year deal, make sure at the end of it you can move," he said. "It's undoubtedly worth shopping around to find the best deal."

With the cut in Halifax's basic rate existing borrowers will be able to transfer to paying interest daily, but the bank will not be able to move people across automatically.

There have also been warnings that home owners could be worse off, as lenders cut back on special deals.

Ian Wilson, managing director of MyNewDeal, a pan-European finance company specialising in offering mortgages, said: ''I think customers will be in a worse position over the coming months.

"Those wanting to remortgage are not going to get the same sort of deals.''

Should this week's moves spark a full-scale price war, he said, there would be considerably less choice, both for first-time buyers and existing borrowers.