In a significant boost for prospective homeowners, the UK mortgage market is currently offering the most extensive selection of low-deposit mortgages for first-time buyers in nearly two decades. With over 500 available products permitting 95% loan-to-value (LTV) borrowing, 2026 appears promising for those seeking to enter the property market.
Surge in Low-Deposit Mortgage Options
Recent data from Moneyfacts indicates that as of February 2026, there are 537 mortgage deals allowing 95% borrowing, nearly doubling the 274 options available just one year prior. This increase reflects a growing trend among banks and building societies to relax their lending criteria, making it easier for first-time buyers to secure financing despite the ongoing challenges of high living costs and rental expenses.
Rachel Springall, a finance expert at Moneyfacts, highlighted that this is the highest number of 95% LTV deals since March 2008. She stated, “This year is setting itself up to be a fruitful one for first-time buyers, and really, they need all the help they can get amid the lack of affordable housing.”
Current fixed-rate deals for those borrowing 95% start at approximately 4.47% for two-year terms and 4.53% for five-year terms. For individuals able to provide a deposit of 10% or more, even more mortgage options become available, with a record 981 mortgages on the market for those borrowing 90% of a property’s value.
High-Value Offers from Major Lenders
Santander has recently made headlines by introducing a mortgage product allowing first-time buyers to borrow up to 98% of a property’s value. This five-year fixed-rate loan requires a minimum deposit of £10,000. While Santander is the largest lender to offer an LTV above 95%, other institutions such as Skipton and Yorkshire building societies have also introduced competitive products, permitting borrowing of up to 100% and 99% respectively.
However, potential borrowers should be aware that these high LTV options often come with specific restrictions and eligibility criteria regarding applicant profiles and property types.
Bridging the Information Gap
A recent study from the Building Societies Association (BSA) revealed that many aspiring homeowners may not fully understand their options. The research showed that nearly half (47%) of individuals interested in buying a home have never consulted a lender or mortgage broker to explore available deals. Alarmingly, 46% of those who had inquired did so over a year ago.
The BSA found that when presented with the various low-deposit options, two-thirds of respondents believed they could secure a property sooner than anticipated. This disparity underscores a significant disconnect between public perception and actual market possibilities, indicating that many could be closer to homeownership than they realise.
Why it Matters
The expansion of low-deposit mortgage options marks a pivotal moment for first-time buyers in the UK, particularly in a climate where affordable housing remains a pressing issue. As financial institutions respond to the needs of new borrowers, the potential for increased homeownership could stimulate economic growth and provide stability in the housing market. This evolving landscape not only empowers individuals to achieve their homeownership dreams but also fosters a more accessible and inclusive financial environment for future generations.
