DESPITE the good news that house prices are stabilising, figures released by the Central Bank this week paint a chilling picture. According to the figures, mortgage debt has doubled in three years and now totals over 120bn. As debt levels hit new records, and with a sixth rise in interest rates likely next month, there can be little doubt that more and more cash-strapped home owners will be looking to reduce their soaring mortgage repayments.

Stepping in to cushion the burden on buyers, and increase competition in the market, lenders are now offering a range of innovative mortgage products.

Hot on the heels of the AIB 2,000 Cash Bonus mortgage offer, NIB has set the cat among the pigeons with its new LTV (loan to value) mortgage. Targeting existing borrowers who have built up equity in their homes, this product takes into account the rapid increase in house prices in recent years. According to NIB, up to 10,000 people have already enquired about the new mortgage and, despite industry comments that other lenders will take a wait-and-see approach to this innovation, banks may be under pressure to respond and prevent existing customers switching to cheaper rivals.

While this is good news for buyers, the big question is, how will mortgage competition affect house prices?

Already some commentators are suggesting that a mortgage war is in the offing. Last year just 26,000 mortgage holders opted to refinance. However, this figure has grown by 20% this year as increasing debt levels focus people's minds on the advantages of switching mortgage.

The LTV mortgage is available on NIB's ECB Tracker and on two-, three- and five-year fixed-rate options. Loan to Value (LTV) is the amount of a mortgage relative to the value of your house and the cost of a loan is linked to it.

But fears that a mortgage war could inevitably drive up house prices are premature, according to Paul Murgatroyd, economist with Douglas Newman Good.

"There's a good few steps between a mortgage war and house-price rises, particularly in a climate of rising interest rates. Overall, increased competion in the mortgage market is more likely to underpin demand and keep prices stable going forward."

Ormond Quay two-bed back on the market QUEUES formed at the recent launch of 3 Ormond Quay.

The small development of eight one- and two-bed apartments sold out within minutes of launching and now buyers who were pipped at the post have a second chance to stake a claim on this city-centre development as a top-floor unit goes back on the market.

According to the agent, the high demand for Lower Ormond Quay shows there is huge interest in welllocated converted buildings. This bodes well for the continuation of the Living Above The Shop tax scheme, which was bogged down by myriad building regulations and restrictions, but with city-centre sites now dwindling, more developers might be tempted to convert.

No 7 is to the rear of the development, facing north.

Beautifully presented, this two-bed apartment spans 67sq m with two spacious bedrooms, a fully-fitted kitchen with integrated appliances, living room and bathroom. It is carpeted throughout and has a video intercom.

Price: 520,000 Agent: Lisney, 01 884 0700