Two-year fixed rate deals with Northern Rock start at 4.19% at 60% LTV, compared to 5.19% for the same deal on January 21.
Five-year fixes are available at 6.69% at 80% LTV compared to 6.89% on offer on two weeks ago.
But mform.co.uk says the government-backed lender has to come out with better priced products in order to compete.
The consumer website claims Northern Rock’s two-year fixed rate deal works out as £1,664 more expensive over the two-year period compared to the best deal at 3.5%.
Francis Ghiloni, marketing and business development director of mform.co.uk, says: “It is good news for the mortgage market that Northern Rock are back in business as it will increase the number of lenders.
“A year ago Northern Rock had 25% of all lending so its departure was a serious blow.”
He adds: “The increased choice is good news but the deals aren’t yet entirely good news for borrowers as its best deals are reasonably competitive but not that competitive. The Rock isn’t on a roll yet.
“The genuine good news for all borrowers and the market is that signs of normality are being detected. Rates have actually fallen in line with base rate cuts and there are indications that normal service might be resumed.”