Barclays has lowered the interest rate that it provides through the Woolwich, on its tracker rate mortgages, to just 1.48 per cent above the base rate.

This makes the overall rate of interest 1.98 per cent. However this low rate of interest will be short lived as it only applies for a year, before it rises to 2.49 per cent over the base rate, making it 2.99 per cent.

Furthermore only customers with a 40 per cent, deposit will be able to apply for the tracker rate.

Katie Tucker from the mortgage broker Mortgageforce, said: "It is a bit cheeky coming in at 1.98 per cent, as it is obvious it is a step rate. Other lenders offer better rates over two or three years and up to 75 per cent."

She also warns borrowers to think carefully about low discount and tracker rates.

She also added: "Although tracker and discount rates are looking very low currently, first-time owners or anyone on a restricted budget should consider very carefully whether they could continue to afford their mortgage payments if that rate does increase by a few per cent."