Clydesdale and Yorkshire Banks have launched new lower rate first time buyer mortgages for those with smaller deposits.

Launching across the banks’ retail branch and direct networks from tomorrow, 11 October 2013, the rate for first time buyers with  a 5% deposit has been cut by 50 bps, from 5.49% to 4.99%.

A new loan to value (LTV) tier at 90% is also being introduced, priced at 3.99%.

First time buyers taking the new three-year fixed rate deals will also benefit from the banks’ current offer of no arrangement fee, saving £999, free standard valuation and £250 cashback on completion.

Andrew Pearce, retail director for Clydesdale Bank, said: “We are long-time supporters of first time buyers with lower deposits having kept 95% loans available when others withdrew theirs. We have focused on proper underwriting, good affordability measures and consideration of individual circumstances.

“Our new 95% first time buyer mortgage is simple; one loan, one rate, no arrangement fee.  Plus there’s the added benefit of a free valuation and £250 cashback.  This underlines our on-going commitment to playing our part in a healthy, sustainable housing market.”