Newcastle Intermediaries has reduced the rates by up to 0.26 percentage points on its high loan to value residential mortgages.
The five-year fixed rate is now available at 3.49 per cent with a maximum LTV of 95 per cent and offering a 10 per cent overpayment facility per year.
The lender has also introduced a two-year base rate tracker at a current rate of 1.79 per cent above bank base rate and up to a maximum 95 per cent LTV.
As well as reducing rates across its high LTV products, the lender has increased the maximum loan size for the 95 per cent LTV range from £300,000 to £400,000.
Stuart Miller, customer director at Nationwide Intermediaries, said: "It has been reported that 95 per cent LTV mortgage rates have reduced by around 0.5 per cent in the last six months, the most significant fall across all loan to value levels. This is great news for first time buyers who’re hoping to get on the property ladder this year.
"This is why at Newcastle Intermediaries we’re pleased to announce the reduction in rates on selected 95 per cent LTV mortgages to help more first time buyers take their first step onto the ladder, or help next time buyers looking to move and remortgage borrowers to raise additional funds for home improvements."
Paul Hampton, a financial adviser at Approved Mortgage Solutions, said: "Because first time buyers have so many other demands on their incomes, saving for a deposit takes such a long time, which is why high LTV products are more in demand than ever.
"And for those clients who have smaller deposits, they usually benefit from free valuations and cashback to help with legal fees."
Greg Cunnington, director of lender relationships and new homes at Alexander Hall, added: "The success of the Help to Buy scheme has shown the demand for 95 per cent lending, particularly amongst first time buyers.
"The increasing number of lenders in this space is very welcome, and mortgage rates are notably reducing at this loan to value bracket.
"The Help to Buy scheme is not for every client, and many first time buyers want to look at all property types, so the increasing options here are very welcome and a real boost to the first time buyer market in particular."
