The product has a rate of 2.58% + base rate capped at 4.38%. Versus the average rate of a fixed product on the market at 4.32%, the capped tracker will have cheaper monthly payments up to 1.75% bank base rate.
At the 4.38% cap, borrowers will have a maximum downside of being £22.08 per month worse off, against the average fixed rate.
Richard Tolchard, senior mortgage product manager at First Direct, said: “It's understandable that many borrowers are nervous about missing out by fixing too soon or being stuck on a tracker when the rates go up.
“However, with economists almost unanimous that rates won't increase this year, a capped tracker lets them benefit from low variable rates now with the cap there to protect them should rates rise quicker and higher than anyone thought.”
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