Nationwide, Britain's biggest building society, has become the first lender to re-introduce mortgages worth up to 95% of a property's value.

But the new home loans, which are only available to existing customers who are moving house, come at a high price. Borrowers wanting a fixed-rate deal will have to pay 7.18 per cent — 5.18 percentage points above the Bank of England base rate. The building society offers homeowners with a 40 per cent deposit a similar deal at 5.38 per cent, a difference of £225 a month on a £150,000 interest-only loan.

The Times