42-inch plasma TV - comes with mortgage attached

It is not unusual for lenders to throw in extras to entice borrowers to take out their mortgages, but yesterday saw the launch of the first home loan to come with a free plasma TV.

Details emerged 24 hours after a division of Bradford & Bingley was criticised for a mortgage that enables homebuyers to borrow up to 130% of the value of their property.

Scarborough building society's "plasma mortgage" is likely to fuel the debate over the tactics used by some lenders to attract customers.

Consumer groups have expressed concerns about Britain's debt mountain, and a report yesterday from the Financial Services Authority highlighted how growing numbers of households are unable to cope.

Scarborough said it was of fering a "state-of-the-art" Sony WEGA 42-inch plasma television - recommended retail price £3,299.99 - to people who sign up for its new flexible base-rate tracker loan or flexible five-year fixed-rate deal.

The society said mortgages were traditionally "relatively boring", and it wanted to offer deals that were "more interesting and rewarding".

However, mortgage broker Chase De Vere Mortgage Man agement said that while the plasma mortgage was a novel idea, its rates were not competitive. "They have priced it so most people will simply be paying for the television through the higher rate," said Simon Tyler at the broker.

Last year, West Bromwich building society made headlines when it offered a free Rover 25 car with its "Brum Brum" mortgage.

Meanwhile, Mortgage Ex press, Bradford & Bingley's specialist lending arm, came under fire from some quarters after announcing its "Max 130" deal, aimed at first-time buyers and those looking to consolidate credit card and other debts.

If someone borrows 130% of the value of their home, they would in effect be starting out in negative equity and it could be years before their property is worth more than their mortgage.