"A number of lenders, including ourselves, are starting to widen margins again by cutting back on very heavy front end discounts that have been a feature of the early part of this year," Mr Longhurst said.
He was speaking after the Lloyds TSB group announced a 12 per cent rise in half year pretax profits to pounds 1.14bn. The shares fell 8.5p to 332p on profit taking as analysts praised the good results.
Mr Longhurst's comments came the day after Nationwide Building Society shaved its basic mortgage rates to the lowest for 30 years, indicating that some building societies are still determined to fight for market share with lower rates.
Mr Longhurst said the price war was fading because of a stirring of activity in the housing market "so we can look forward to new business rather than remortgaging between lenders."
Much mortgage business during the price war has been due to homeowners switching lenders, which had eroded margins rather than increased the size of the market, he said.
The merger of Lloyds, Cheltenham & Gloucester and TSB was designed to exploit retail banking business, including mortgages, and this appears to be paying off in substantial increases in market shares.
Peter Ellwood, deputy chief executive, said the group's personal and mortgage lending were both growing in the first half at twice the market average - 21 per cent in the case of personal loans and 9 per cent for mortgages.
The group lost 1,400 jobs in the six months, and Sir Brian Pitman, chief executive, linked future job cuts directly to the group's success or otherwise in grabbing market share. There were "no plans for massive closure of branches," he said, after confirming that 30 went this year.
Sir Robin Ibbs, Lloyds TSB chairman, confirmed a new chairman and chief executive would be announced within two months. There has been speculation that Sir Brian will become chairman, though others believe he may go to leave his successor a freer hand.
Sir Robin also made clear that discussions about the future of Lloyds TSB's majority stake in Lloyds Abbey Life are are at an advanced stage, but gave no clues to whether it would result in a sale or a full takeover.Reuse content