Capped trackers are available at 65% loan to value, at 1.98% above base rate capped at 3.98%; or at 75% LTV at 2.38% above base rate, capped at 4.38%. Both products come with a £1,499 booking fee.
For a fee free capped tracker, First Direct’s 65% LTV product will be available at 2.38% above base rate capped at 4.28%; or at 75% LTV at 2.78% above base rate, capped at 4.68%.
All capped trackers are capped until 30/09/2014.
Richard Tolchard, senior mortgage product manager at First Direct, said: “Homeowners continue to be unsure whether to track or fix. With a capped tracker they don’t have to choose, they get a low tracker rate whilst rates remain at 0.5% while having the reassurance of a cap to the rate when base rate rises.
“We listened to our customers and some said they prefer to pay a different rate rather than a booking fee when taking out a new mortgage. We created the fee free option to do just that.”
Dale Jannels, sales and marketing director at All Types of Mortgages, said: “Do we really believe that rates are going to increase by 2% over the next two to three years? From a broker’s point of view I don’t think anybody is going to think that interest rates are going to go up that much in the next two to three years.
“If the cap was lower at say 2.98% then it would be a lot more attractive. It’s very interesting and it’s still an attractive product but each individual needs a product which is tailored towards them. There might be a more suitable product available out there for an individual.
“I don’t believe it will impact intermediary business that much. The majority of intermediary business will be when a client has already been down to the high street lenders and have been declined for whatever reason and they’ve come to an intermediary to help source the right mortgage for their scenario.”
