The Yorkshire Building Society has launched the lowest fixed rate mortgage on the market available to borrowers with a 10% deposit.

The mutual is offering a 1.98% rate, fixed for two years, at 90% loan to value (LTV).

The mortgage has a £1,345 product fee.

At 90% LTV there is also a five year fixed-rate at 2.93%, also with a £1,345 product fee.

For those looking for a lower fee option, the Society is also offering a 2.59% at 90% loan-to-value, which has no product fee and free standard valuation, with free standard legal work for those remortgaging or £250 cashback on completion for those buying a new home.

Brendan Gilligan, mortgage product manager, said: “We know how hard it can be to get that first foot on the property ladder, and we understand how important homeownership is to people under 40 in the UK, with our research earlier this year showing that the majority prioritise this as more important than getting married or having children.

“As a mutual which puts its members’ interests first, we want to help as many people as possible to achieve their dream of homeownership. By offering these very competitive rates, we are hoping to help first time buyers get on to the property ladder.”

Rachel Springall, spokesperson at Moneyfacts, said: “It’s fantastic to see Yorkshire Building Society support first-time buyers by offering a competitively priced deal for those with a 10% deposit.

“It can be a great hardship trying to get onto the property ladder so finding a cost-effective deal to reduce monthly mortgage payments is essential.

“Borrowers must always work out the true cost on their mortgage deal and raise enough cash to cover all their upfront fees, such as legal costs or a product fee.

“In this low rate market buyers should ideally be aiming to overpay on their mortgage whenever possible so that they can raise the equity in their home and reduce the term of the loan.”