A new market-beating fixed rate is set to launch next week with a rate of 0.95%.

The loan is expected to come with a hefty £1,499 fee.

Mortgage broker Private Finance says it has been pre-warned of the product launch, but cannot confirm which lender it is.

The new deal will be available up to 60% LTV and is likely to require borrowers to have an impeccable credit score.

It comes after Hinkley & Rugby brought out a discount variable rate of 0.99% last month for borrowers with a 35% deposit.

The deal comes with a £199 arrangement and £500 completion fee.

TSB is also offering a remortgage deal fixed for two years at 0.99% for borrowers at 60% LTV with a £1,495 fee.

Private Finance associate director Chris Sykes says: “This has come out faster than we initially expected, having thought previously that lenders would slowly bring rates down to compete with TSB and Hinckley and Rugby.

“It looks like we have a new competitor in the space pitching for market share. 

“It is likely that this product will come with a £1,499 fee and only be for the highest quality business at 60% LTV or below and potentially have a minimum loan size of £350k+.”