The building society has pared the interest rate charged on its 95% loan-to-value (LTV) two-year fixed rate from 5.95% to 5.59% and dropped the Early Repayment Charge.

There is no completion fee, but applicants have to pay a £195 reservation fee for the product.

Steven Marks, corporate development executive for Newcastle BS, said:

“This reduction in the rate of our 95% LTV product demonstrates how Newcastle BS is committed to supporting borrowers as it provides an opportunity for those with a smaller deposit to access a competitive mortgage product.

“Additionally, the no ERC feature gives more flexibility to a person if their circumstances change.”

Newcastle’s rate cut follows similar changes at other smaller lenders. Last week Cambridge BS launched a stepped 95% deal for first-time buyers while Saffron BS has also refreshed its high LTV range.