Lloyds TSB has made changes to its new fee saver mortgage for first-time buyers.

The bank claims the deal is an improved one and offers borrowers the chance to save up to £760 on the cost of their mortgage and an additional £500 cash back incentive.

The two-year fixed rate mortgage is offered with rates from 5.99% and is available with an LTV of 85%-90%.

First-time buyers will not have to pay the mortgage product fee of £495, or the mortgage account fee of £265. With the cash back added on the total package is worth £1,260 in fees saved and cash back, it claims.

All products are available on loans from £5,000 up to £1 million.

Stephen Noakes, mortgage director, Lloyds TSB, said: “One of the main barriers facing first-time buyers is the associated costs of buying your first home. We are delighted to be enhancing this product, designed specifically for those looking to take the first step on the housing ladder, to help remove the key hurdle of cost.

“In particular, the cash back will be a very helpful addition and should go some way to alleviating some of the additional costs associated with buying your first home, such as solicitors’ fees or stamp duty.”