Accord Mortgages returns to the 95 per cent loan-to-value mortgage market tomorrow (Wednesday), in a move aimed at “giving brokers more choice for first-time buyers with smaller deposits”.

The product, only available through advisers, has a five-year fixed rate of 3.99 per cent, and comes with a £995 fee as well as free standard valuation.

The firm’s standard underwriting policy and terms will apply, but a maximum 4.49 per cent loan to income ratio applies to “ensure affordability”.

The maximum loan size is £500,000, however flats and new build homes are excluded.

The move comes ahead of the government’s mortgage guarantee scheme to boost higher value lending on homes valued at up to £600,000, which begins next month.

Accord’s product is not part of the plan announced in last month’s Budget by chancellor Rishi Sunak.

Accord is the broker-only mortgage arm of Yorkshire Building Society.

Accord Mortgages managing director Jeremy Duncombe says: “Part of our purpose as one of the UK’s largest building societies is to help people own their own home, and the unique challenges of the last year have made that harder than ever for some.

“This new 95 per cent mortgage will give brokers another option to help clients with smaller deposits realise their home ownership ambitions.”

Accord says it will monitor demand for 95 per cent LTV mortgages “to ensure service levels are managed carefully”.

Duncombe adds: “As the first lender to launch a new 5 per cent deposit mortgage to the market, it’s important we balance demand with being able to offer the high levels of service brokers and clients expect. As such, this product may be withdrawn at relatively short notice, but we will continue to communicate our intentions proactively wherever possible.

“However, as more lenders join us in the 95 per cent LTV mortgage market, either with or without the mortgage guarantee scheme, we’re hopeful buyers with just a 5 per cent deposit will be able to benefit from a more sustained offering in the market.”