Principality has announced the launch of a new 95% LTV five year fixed rate mortgage.

There are no product fees and there will be no tightening of the lending criteria, the building society said.

It comes with a £99 ‘commitment fee’ and the maximum loan size of £250,000.

The deal is limited to Wales & post code areas SY,HR CH1,CH2,CH3 and CH4.

Christopher Johnson, head of mortgages at Principality, said: “As a leading Welsh mutual that serves a community of members, we are committed to coming up with practical solutions to benefit Welsh people. The shortage of mortgage products realistically available to those with a low deposit has been a major stumbling block for first time buyers and we hope that this product provides an opportunity for them to own a high quality, affordable home.

“We took advantage of the Funding for Lending Scheme with our members in mind, and will be looking at ways like this to pass on the benefits of cheaper funding. A lot of lenders have taken the opportunity to slash rates for those with high deposits, leaving First Time Buyers out in the cold.

“We have made this product as easy to access as possible, and we are committed to offering this mortgage at the best possible rate to the people in our heartland. We will continue to develop innovative products like this to stimulate the Welsh housing market and drive the economy forward.”