Leeds Building Society has launched a new cashback mortgage available to borrowers with just a 5% deposit.

The fee-free, two-year fixed rate deal of 5.69% is available on mortgages up to 95% of the property’s value.

It comes with £250 cashback and a free standard valuation and is available on purchases only.

Jonathan Thompson, senior mortgage manager at Leeds Building Society, said: “Borrowers with smaller deposits remain a key focus for us, as we seek to deliver on our purpose to put home ownership within reach of more people.

“We’re seeing strong demand for fixed rate higher-LTV mortgages and, with cashback on completion, we expect this latest deal to appeal particularly to first time buyers.”

First-time buyer options

“This type of ‘traditional’ mortgage is just one of the options we offer for home buyers with smaller deposits, alongside affordable housing schemes such as Shared Ownership, and we’re always seeking new ways to support routes into home ownership,” Thompson continued.

“We understand building up a deposit is often the biggest challenge facing those wanting to step onto the housing ladder. To help with that, in the spring we launched Home Deposit Saver, a regular savings account which pays the saver an extra £500 when they receive their mortgage offer from the Society.”

Earlier this month, Leeds became the first UK lender to partner up with Experian for a free service – Experian Boost. It takes account of an applicant’s regular current account payments when assessing their credit score, providing more data about their repayment habits and potentially boosting their score.