Spotlight On: First Direct's two-year tracker

The deal

A two-year repayment loan from the online bank First Direct, with an interest rate tracking 1.69 per cent above the Bank of England's base rate – currently 2.19 per cent – for those looking for a loan worth 65 per cent or less of the property's value.

Good points

The rate won't be beaten, with the closest competition from Coventry Building Society at 2.89 per cent. And the fee – part of the bank's £99 fee deal across all mortgage products – is another market leader as Coventry's loan will cost £999 to arrange.

Bad points

Customers would need to bank on interest rates remaining low, plus it's no good for those who haven't saved 35 per cent of the value of their home.

Conclusion

This is an attractive offer for those willing to have a high stakes flutter on rates staying low for at least two years. You'll be basking in low repayments for now, but with inflation going up and the Government's sweeping spending cuts, the pressure is on for a hike in the base rate and subsequently your mortgage repayments.