Nationwide Building Society is to bring back 95% mortgages in a boost for first-time buyers and borrowers with small deposits, however it won't include new-build properties.
Mortgage deals for borrowers with 5% deposits largely vanished from the market last year, as providers became cautious about riskier loans and the possibility of house prices falling in the tough economy.
The initiative made a comeback last month, after Chancellor Rishi Sunak unveiled a new Government-backed mortgage guarantee scheme for people with low savings.
However, Nationwide said it will launch without government support on May 20 - following in the footsteps of Yorkshire Building Society in March.
It said the new mortgage range will be available to those looking for their first home as well as new customers who are moving, ensuring as many people as possible can benefit.
People will need to pass certain criteria to get the new deals. They will only be available to employed borrowers and the property must be a house and not a new-build.
Nationwide currently has a maximum LTV (loan-to-value) of 85% for self-employed applications and for flats.
Among the new 5% deposit deals Nationwide will offer, borrowers can choose a two-year fixed-rate mortgage, offered at various rates depending on the fee paid. There is a 3.49% rate for a £1,499 fee, a 3.69% rate for a £999 fee and a 3.84% rate with no fee.
Five-year fixed-rate mortgages will also be offered. They include a 3.79% rate for a £1,499 fee, a 3.89% rate for a £999 fee and a rate of 3.99% with no fee.
Two-year tracker rates are also available.
First-time buyers will get £500 cashback when they complete their 5% deposit mortgage with the society.
The new products will be available via mortgage brokers and also directly through Nationwide.
Nationwide had been offering 5% deposit deals up until mid-June in 2020.
Henry Jordan, director of mortgages at Nationwide Building Society, said: "As the UK's biggest building society and second largest lender, supporting people into their first home is at the heart of what we do.
"As one of the leading lenders to first-time buyers, we feel confident returning to the 95% LTV market without the need for the mortgage guarantee scheme.
"By not being part of the scheme, we can provide improved value to our members and this is demonstrated by the market-leading rates we're announcing today."
Eleanor Williams, a finance expert at Moneyfacts.co.uk, said: "It is fantastic to see further choice and product options become available at 95% loan-to-value.
"Many would-be first-time buyers and those with limited deposits spent much of last year unable to move forward with their home-buying dreams as availability contracted dramatically in the higher loan-to-value mortgage tiers.
"For those now contemplating progressing with a mortgage deal, it is vital they consider the whole package on offer, taking into account the initial rate but also other factors such as the fee they would need to pay and any incentives that may be available to them.
"Seeking independent, qualified advice could therefore be invaluable in ensuring they consider all the options available to them and select the right deal for their circumstances."
