With Save to Buy, savings accounts can be opened with a minimum of £50, with customers saving at least £50 per month for six months or more.

First-time buyers and home movers will then be eligible to apply for a Nationwide fixed rate mortgage. If the customer goes on to take a Save to Buy mortgage, depending on how much they save, there is also a cashback reward of up to £1,000.

The new rates for the 95% loan-to-value (LTV) deals are as follows:

• Two-year fixed rate is 4.79% with a £999 fee (with a reduced fee of £499 for first time buyers)
• Three-year fixed rate is 5.19% with a £999 fee for new borrowers (£499 for first time buyers)
• Five-year fixed rate is 5.39% with a £999 fee (£499 for first time buyers)

Existing mortgage customers benefit from an additional 0.10% discount on the new customer rates.

In addition to the Save to Buy changes, the 95% LTV five-year fixed rate deals for existing borrowers will be reduced by 0.50%, with a rate of 5.49% with a £999 fee, 5.69% with no fee.

Richard Napier, Nationwide’s divisional director of mortgages and savings, said: “With issues of affordability of increasing importance, we are aiming to help aspiring homebuyers with smaller deposits to have the means to secure a home of their own.

“With Nationwide’s established Save to Buy scheme, customers who have demonstrated a history of saving are being given the opportunity to access very competitive mortgage rates. This shows that good savings habits and strong credit quality go hand in hand.”