The Halifax is to make payments to 300,000 mortgage customers that will amount to a sum of £500m.

These "good will" payments come following the Lloyds Banking Group bank admitted confusing customers about its right to charge them more for their standard variable rate mortgages.

The Halifax raised the margin on some of these mortgages from 2% to 3% above base rate in January 2009.

The payments agreement was struck following a deal with the Financial Services Authority (FSA).