Nationwide Building Society is reducing its selected fixed and tracker mortgage rates at 95 per cent loan to value (LTV) by up to 0.5 per cent.
From today (October 30), the society is offering a sub-3 per cent rate for those with a five per cent deposit.
Rates for the 95 per cent product start at 2.99 per cent for the two-year tracker with a £999 fee and 3.39 per cent with no fee – marking a reduction of 0.5 per cent.
To support customers looking for longer-term payment security, three and five-year fixed rates at 95 per cent LTV have also been reduced, with the three-year fixed product starting at 3.59 per cent with a £999 fee and 3.89 per cent with no fee, while the five-year fixed rate deal is 3.74 per cent with a £999 fee and 3.94 per cent with no fee.
At the same time, the maximum loan size at 95 per cent LTV will be increased from £350,000 to £500,000 for all house purchase transactions, including for first-time buyers, which will be particularly useful for those buying where property prices are higher.
Henry Jordan, director of mortgages at Nationwide, said: "We know that finding a deposit can be a challenge for those looking to take their first steps towards home ownership.
"The changes announced today offer competitive rates for those with small deposits, along with the added flexibility of being able to borrow up to £500,000, and are aimed at particularly supporting first time buyers, as well as those living in areas with higher property values."
In addition, the maximum LTV for further borrowing as well as those looking to remortgage to the society with additional borrowing will increase to 90 per cent LTV.
This is apart from debt consolidation or repaying a non-Help to Buy second charge.
Alan Chan, director and chartered financial planner for London-based IFS Wealth & Pensions, said: "I think Nationwide has a great range of mortgages for first-time buyers who often find it very difficult to save for a deposit and so they willl just need to build up a 5 per cent deposit with these deals.
"At a time when the Bank of England base rate was recently increased, to see that Nationwide is reducing their mortgage rates by up to 0.5 per cent is very encouraging to see for first-time buyers."
All standard mortgage valuations are fee-free, while first-time buyers receive a £500 cashback to help with costs and those remortgaging to the society can choose between £500 cashback or free standard legals.