Priced at 3.99 per cent, the product comes with a free standard valuation and is fee-free.
It will be available exclusively through intermediaries for purchase and remortgage.
Ashley Pearson (pictured), business development manager at The Loughborough, said: “It’s been a tough year for borrowers with a smaller deposit so I’m glad we can offer something for those who need it. The five per cent deposit can be from the borrowers’ own savings or gifted.
“Of course, we also offer mortgages for those with little or no standard deposit from our Family Assist range, but these need family support and not everyone has that.”
First Direct reduces rates
First Direct has cut rates across its two and five–year fixed rate mortgages, by as much as 0.15 per cent.
This includes the two-year fixed fee saver product at 60 per cent LTV which has been cut by 0.05 per cent to 1.44 per cent.
At 75 per cent LTV, both two-year fixes have been reduced by 0.10 per cent with a fee-free product now with a rate of 1.79 per cent and the £490 fee paying option set to 1.44 per cent.
Across five-year fixes, the mortgage with a £490 fee at 85 per cent LTV has been reduced from 2.89 per cent to 2.79 per cent.
At 75 per cent LTV, both mortgages have been cut by 0.05 per cent. The fee-free product now has a rate of 1.94 per cent while the £490 fee paying option has a rate of 1.64 per cent.
Lloyd Robson, commercial director at First Direct, said: “We’re seeing increased demand among homebuyers looking for shorter term two and five-year fixed rates. In response we’ve reduced our already competitive rates even further.
“We also understand that giving borrowers a choice of either fees and fee–free deals gives them more flexibility when looking at their mortgage needs.”