New figures suggest that aspiring first-time buyers now have the widest range of low-deposit mortgage options seen in almost two decades, offering renewed hope for those trying to step onto the property ladder in 2026.
Over recent months, banks and building societies have begun easing affordability criteria and introducing new products that allow buyers to borrow up to 95% of a home’s value. In some cases, lenders are even offering mortgages with higher borrowing limits, reducing the amount of savings needed upfront.
For many would-be homeowners, building a deposit remains the biggest barrier to buying a property. High rents and rising living costs mean that saving each month is often difficult, leaving many stuck in rented accommodation for longer than planned.
According to data from Moneyfacts, there were 537 mortgage deals available at the start of this month that allow buyers to borrow 95% of a property’s value. This is almost double the number of similar deals available in February 2024, when only 274 were on the market.
This represents the highest number of 95% loan-to-value (LTV) products since March 2008. Rachel Springall from Moneyfacts said the growth in choice is a positive sign for buyers struggling with affordability. She noted that the year ahead could prove encouraging for first-time buyers, especially at a time when affordable housing remains in short supply.
Interest rates on these low-deposit products have also become more competitive. At present, two-year fixed-rate mortgages for buyers borrowing 95% typically start at around 4.47%, while five-year fixed deals are available from roughly 4.53%.
Those who are able to save a slightly larger deposit have even more choice. At the beginning of February, a record 981 mortgage products were available for buyers putting down at least 10%, allowing them to borrow 90% of a property’s value.
Some lenders have gone further by launching products that exceed the traditional 95% threshold. Earlier this month, Santander attracted attention with a mortgage aimed at first-time buyers that allows borrowing of up to 98% of a property’s value. The product is offered as a five-year fixed-rate deal and requires a minimum deposit of £10,000.
Although Santander is currently the largest lender to offer such a high loan-to-value product, it is not the only one. Skipton Building Society and Yorkshire Building Society already provide mortgages that allow borrowing of 100% and 99% of a home’s value respectively, alongside a small number of similar schemes from other providers.
However, these products often come with strict eligibility rules. Not every buyer or property will qualify, and some mortgages are limited to specific circumstances, such as long-term renters with strong payment histories.
New research from the Building Societies Association suggests many potential buyers underestimate what may be possible. The organisation found that nearly half of those hoping to buy a home had never spoken to a mortgage lender or broker to explore their options. Even among those who had, almost half had not done so within the past year.
When participants were shown examples of low-deposit and zero-deposit mortgages offered by building societies, two-thirds said they could afford to buy sooner than they had expected. This revealed what the BSA described as a significant gap between public perception and the reality of the current mortgage market.
The findings indicate that many people may be ruling themselves out unnecessarily, without first seeking professional advice or understanding the range of products now available.
While challenges remain around affordability, house prices, and supply, the growing availability of low-deposit mortgages suggests that lenders are becoming more confident and more willing to support first-time buyers.
For those hoping to buy their first home, the message is clear: options are expanding, and speaking to a broker or lender could reveal opportunities that were not available just a year ago.
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