Virgin Money is launching a 90 per cent loan-to-value first-time buyer mortgage tomorrow.

The lender will be offering a new five-year fixed rate starting from 3.69 per cent with a £995 fee as well as fee-saver alternatives.

It comes after the lender previously revealed that it would be upping rates on its product transfer deals at 90 and 95 per cent tomorrow by up to 40 basis points.

Earlier today Halifax revealed that it would be returning to the 90 per cent LTV space with a new first-time buyer product on Monday, in a move celebrated by brokers.

Advisers hope that the return of large lenders to high-LTV tiers may help to push down pricing.

Mortgage Brain analysis this week found that the cost of borrowing at 90 per cent LTV has increased by 28 per cent over the past year.

Borrowers with a 10 per cent deposit who wish to fix for two years will now pay an average of £5.22 per £1,000, compared to £4.06 in November 2019.

For a £200,000 mortgage, the price increase equates to an extra £2,784 a year.