TSB will pay a year’s worth of council tax for new borrowers taking out a mortgage between 75 and 90 per cent LTV.
The lender will pay off the tax up to a maximum of £2,500, with the offer open to both first-time buyers and home movers.
Some 55 per cent out of 2,000 homeowners polled by the lender reported council tax as their largest monthly expenditure after their mortgage payments.
Borrowers must send a copy of their first council tax bill relating to the current tax year and TSB will debit the full annual amount with 21 days.
TSB mortgages director Ian Ramsden says: “There are many costs associated with buying a new home, so by covering the cost of council tax in the first year, TSB can help to ease the financial burden for new home owners.
“Helping people take that first step and climb future rungs up the property ladder is a fundamental part of creating thriving local economies.”