First direct has introduced its lowest ever two-year fixed rate mortgage with a £999 fee in response to requests from customers with larger mortgage balances.

The choice between low fee/higher rate and higher fee/low rate depends on the size of the mortgage. For example first direct’s new, lowest ever, 65% two-year fixed repayment mortgage comes with a £999 fee and 2.69% rate versus first direct’s 65% two-year fixed repayment mortgage with a £99 fee and 2.99% rate.

A remortgage customer looking to borrow £100,000 would be better off opting for the 2.99% rate/£99 fee as this would lead to a £529 saving over the two-year fixed rate term. On the contrary, a customer looking to borrow £300,000 would be better off selecting the 2.69% rate/£999 fee and save £212 over the two-year term.

Richard Tolchard, senior mortgage product manager at first direct, said: “Earlier this year we succeeded in understanding the needs of customers by introducing the £99 fee giving people the certainty that they would be quickly better off by switching from their standard variable rate (SVR)