Nationwide is launching £1bn of additional lending over the next year for house buyers with a 5% deposit, in a move which could help first-time buyers.

The building society is now offering a range of fixed rate 95% LTV mortgage deals, starting at under 4%.

It said the mortgages would not be part of any scheme, such as Help to Buy, and were being made available to both first-time buyers and home movers.

Rates for the new mortgages start at 3.99% with a £999 fee for the two-year fixed rate deal. There are also three- and five-year fixed rate deals which start at 4.59% and 4.79% respectively.

The society said first-time buyers would continue to receive £500 cashback on all Nationwide mortgage deals.

Nationwide’s Save to Buy scheme, where house buyers commit to saving towards a deposit, and in return receive cashback of up to £1,000 on completion of their mortgage, will be available at a 0.20% discount.

Henry Jordan, Nationwide’s head of mortgages, said: “Nationwide’s move significantly increases the society’s lending in the first-time buyer market and widens consumer choice.

“It aims to build on Nationwide’s traditionally strong support for first-time buyers by offering more mortgage options to those with smaller deposits and helping them to achieve their dream of purchasing a home of their own.

“Nationwide also offers tangible benefits to mortgage customers that go beyond the competitive headline rates. This includes Nationwide’s £500 cashback offer to all first-time buyers, or more if they use our Save to Buy mortgage products.

“Our mortgage deals, combined with other support Nationwide provides such as first-time buyer events and independent guides, demonstrate how Nationwide continually aims to do more for its customers.”