Telephone mortgage lenders are gradually beginning to establish a beachhead in the home loan war by offering a range of heavily discounted loans to prospective borrowers.
Despite opposition from rivals operating through traditional high street branch networks, the newcomers have been able to poach new clients by consistently undercutting their opposition.
The success of telephone-based operations, including that of Direct Line Mortgages, the telephone insurance firm's home loans subsidiary, and Bradford & Bingley Mortgages Direct, the building societies' phone arm, is adding a new twist to an increasingly bitter mortgage price war.
Borrowers are being won over by telephone lenders who offer savings of up to pounds 60 a month on the cost of a pounds 80,000 loan.
As yet, telephone lenders have made barely a dent in the tens of billions of pounds lent each year by large banks and building societies.
Direct Line Mortgages has lent more than pounds 250m to home buyers since launching its mortgage service 12 months ago, the company announced.
The company claimed its staff are now fielding about 250 calls an hour from potential borrowers interested in its variable mortgage rate of 6.25 per cent. Around 15,000 calls were received in the first week of this month, following a brief mention in a television programme.
After a slower start, Bradford & Bingley Mortgages Direct - whose variable rate was set last week at a record low of 5.99 per cent, below bank base rates - is now dealing with thousands of calls each week.
The company has notched up more than pounds 100m in loans since opening for business less than a year ago.
Another telephone lender, FirstMortgage, based in London, has now lent more than pounds 260m to home buyers. The company has recently guaranteed to match the lowest three-year fixed rate packages on the market.
Telephone lenders say that they are able to offer cheaper mortgages by doing without expensive branch networks.
Their initial success points to them grabbing an increasingly larger slice of the mortgage market over the next few years.
John Wriglesworth, head of strategy at Bradford & Bingley, said last week: "Essentially, all we do is have someone on the other end of the telephone. This means our mortgages can be cheaper than those on offer from traditional lenders."
The Bradford & Bingley's cheap mortgage through its telephone arm was also possible because of the building society's decision earlier this month to hand back some pounds 50m in annual profits to existing and future members.
"Because we are not planning to become a bank, we are able to pass on the benefits of our mutual status to borrowers and savers, rather than shareholders, as the banks do," he added.
Despite his lending arm's success in the past year, Peter Wood, chief executive of the Direct Line group, attacked other lenders for trying to restrict the availability of their own special deals to new borrowers - until existing customers decide to switch loans.
"It would appear that loyal customers are ignored and will continue to pay higher rates until they positively threaten to switch lenders," Mr Wood said.
"This means the vast majority of mortgage customers effectively subsidise those who obtain special deals by threatening to switch."