First direct has launched a new three-year capped tracker mortgage.

The 75% LTV deal currently charges 3.08% (2.58% plus Bank of England base rate), and, first direct claims, is 1.24% cheaper than the average three-year fixed 75% LTV mortgage.

The lender says the capped tracker is always more favourable than today’s average three-year fixed rate of 4.32% until the Bank Rate reaches 1.75%.

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.