Nationwide has said it is to offer a mortgage deal of 95% of a property's value to existing mortgage customers who need to borrow because they are moving home.

Although the move will not help first-time buyers, it is a sign that lenders are starting to feel more relaxed, despite the current climate.

There are only nine 95% deals available across the mortgage market, and the deals for Nationwide customers will not come cheaply.

Borrowers with only a 5% deposit will have to pay 3.49% above the current Bank of England base rate, giving a rate of 5.49% from January 1.

Two-year fixed rate mortgages for a 95% loan to value (LTV) ratio start at 6.68% for people who pay a £995 fee, compared with 4.88% for those borrowing only 60% of their home's value.

Nationwide is also relaunching its tracker mortgages - taking the opportunity to increase the margin it charges on the product.

From January 1, a two-year tracker for someone borrowing up to 60% of their home's value who pays a £995 fee will cost 2.49% above base rate, or 4.49% compared with a previous differential of 1.99% above base rate.

People borrowing 75% of their home's value will pay 2.69% above base rate, compared with the previous margin of 2.19%.

The products also have a floor of 1%, meaning that however low the base rate falls, the rate borrowers pay will never drop below 1% plus their margin above base rate, or 3.49% for a borrower on a 60% LTV deal.

The majority of existing Nationwide trackers have a floor of 2.75%, but the group announced that it would not be enforcing it following December's base rate cut.

Nationwide also said that it will increase the cost of its two-year fixed rate mortgages for people with a 15% deposit by 0.3%.

The group said it had made the move to ensure that loans at higher LTVs did not account for too high a proportion of its mortgage business.

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