Yorkshire Building Society has launched a market-leading two-year fixed rate mortgage at 3.25%, to first-time buyers and movers with a small deposit.

The 95% loan-to-value (LTV) mortgage is available from today to homebuyers with just 5% to put down on a property. It includes a £995 product fee plus £250 cashback on completion.

The building society is also offering a 1.97% two-year fix to remortgage and home purchase customers with a 10% deposit, which is available with a £995 product fee and £250 cashback on completion.

Charles Mungroo, mortgage product manager at Yorkshire Building Society, said: “It’s been the season for record low mortgage rates, however the focus has mainly been on borrowers with larger deposits.

“We hope our latest rate reductions appeal to those with smaller deposits or equity amounts and the cashback offer will help to reduce the upfront costs of buying a home.”

Rachel Springall, finance expert at Moneyfacts.co.uk, added: “It’s fantastic to see Yorkshire Building Society offering first-time buyers not only an attractive rate but also an appealing £250 cashback. As with any mortgage, borrowers need to weigh up the overall true cost to find the best deal for them.”