The internet bank owned by Abbey is to trial its mortgages range.

cahoot will offer customers traditional track and two year fixed rate mortgages, and will also offer a specialist "Flexible Plus" scheme. On all mortgages, cahoot will give the choice of a cheaper rate and expensive booking fee, or a slightly higher rate and a cheaper fee.

The bank will offer two year fixed rates at 4.49 per cent and 4.69 per cent and trackers at base rates minus 0.16 per cent and 0.04 per cent. The more expensive Flexible Plus mortgages offers extra features such as payment holidays, overpayment and underpayment. All products will be available by telephone only.

John Goddard, managing director of cahoot, said: "With this new range of competitive mortgages, we’re dipping our toe in the market and testing the demand for mortgages from cahoot.

"As these mortgages are currently only available over the phone, they will really suit people who are comfortable without face-to-face help from a mortgage adviser. These are some of the best rates on the market and we hope the trial will prove popular."

The internet bank joins a rebounding property market, after the Bank of England reported that mortgage approvals were up 8,000 in August on the previous month.