The top mortgage rates dropped further today, but as usual, the best buys come with some big caveats.

The Post Office has launched the lowest ever five-year fixed mortgage at 2.74% with a £995 fee, but applicants need at least a 40% deposit, which is £80,000 on a £200,000 home.

Meanwhile, HSBC has unveiled the lowest-ever two-year fix at 1.98%, with a £1,999 fee and a 40% deposit.

Not only will homeowners need massive downpayments, but there is a maximum loan size of £250,000. This will rule out those who need a big mortgage, especially in London where house prices are highest.

These moves follow the Co-operative Bank, which launched a five-year fix at 2.79% with a £999 fee in November, for those with at least a 40% deposit. This was the previous top five-year fixed rate deal.

While all these deals require a 40% lump sum, which is typical of the best buys, there is some good news for people with smaller upfront amounts, with the Post Office launching a fee-free deal for borrowers with a 10% deposit. This offers a fixed rate of 4.55% for five years.

Data provider Moneyfacts says it is currently the top deal on the market with no fee for buyers with a 10% deposit.

First-time buyer deals

Other offers for first-time buyers and borrowers with smaller deposits include Barclays, which recently launched its Springboard mortgage to help those with a 5% deposit get on the property ladder.

Barclays' scheme requires family members to stump up an additional 10% of the purchase price, kept in a separate savings account.

Meanwhile, Halifax is giving £1,000 cashback to first-time buyers on some of its mortgages.

Rachel Springall, from Moneyfacts, says: "It's great to see the Post Office launching some top deals for borrowers, particularly those aimed at the first-time buyer.

"Fee-free options are ideal for first-time buyers trying to keep upfront costs down."

The Council of Mortgage Lenders recently reported an 8% monthly increase in lending to first-time buyers, which should also help people who are trying to sell their home.