In a major boost for aspiring homeowners struggling with the UK deposit crisis, Santander UK has unveiled My First Mortgage — a 98% LTV (loan-to-value) five-year fixed-rate mortgage aimed exclusively at first-time buyers.
Launched on 3 February 2026, the product allows eligible buyers to purchase an existing house with a minimum deposit of just £10,000, even on properties up to £500,000. This equates to a 2% deposit on a £500,000 home – far below the typical amounts needed today.
Santander’s move comes as data shows saving for a deposit remains the biggest barrier to homeownership, with 52% of UK adults citing it as their main hurdle.
Key features of Santander’s My First Mortgage:
- Fixed interest rate: 5.19% for five years (providing payment certainty amid fluctuating rates).
- Product fee: £0.
- Cashback: £250.
- Minimum deposit: £10,000.
- Maximum loan: £500,000 (borrowing from £190,001 up).
- Term length: 5–40 years.
- Availability: First-time buyers only (including joint applications), via Santander mortgage advisers or brokers.
- High LTV rules: Up to 98% LTV on existing houses only (second-hand properties). For new builds, flats, or properties in Northern Ireland, the maximum is 95% LTV.
- Affordability checks: Strict criteria apply, including a maximum loan-to-income ratio of 4.45x salary. All applications undergo Santander’s standard responsible lending assessments.
This product marks a significant step, as major high-street banks have rarely offered beyond 95% LTV in recent years.
Why this matters: The Deposit Challenge in 2026
Recent figures highlight how tough the market remains for first-time buyers:
- Average deposits often exceed £60,000–£75,000 nationally (higher in London at £125,000+).
- Santander’s own data shows last year’s average first-time buyer deposit with them was over £85,000 — a figure many find unattainable due to modest incomes, high rents, childcare costs, or limited family help.
- Two-thirds of Santander’s first-time buyers in 2025 opted for existing houses, which aligns with the product’s focus on second-hand properties for the 98% tier.
David Morris, Head of Homes at Santander UK, explained:
“We know that saving for a deposit remains one of the biggest hurdles to homeownership. Last year, the average first-time buyer with Santander put down a deposit of more than £85,000, a figure that can feel unattainable… We want to help more people benefit from the stability and sense of pride that owning a home brings, while maintaining our position as a responsible lender.”The five-year fix offers monthly payment predictability, which is valuable in the current rate environment (where some first-time buyer rates hover around 4.5–5%+ for lower LTVs, but high-LTV options are scarcer).
Pros and Cons of My First Mortgage
Pros:
- Dramatically lowers the entry barrier — ideal for those with smaller savings.
- No product fee + £250 cashback helps with upfront costs.
- Fixed rate shields against potential rate rises.
- Specialist advice required, ensuring informed decisions.
Cons:
- Higher interest rate (5.19%) compared to lower-LTV deals.
- Strict eligibility — excludes new builds, flats, Northern Ireland properties at 98% LTV.
- Maximum 4.45x income may limit borrowing for some.
- Early repayment charges apply if you exit early.
- Risk of negative equity if house prices fall (common with high-LTV mortgages).
Is this the right option for you?
If you’re a first-time buyer struggling to save a large deposit and eyeing an existing house under £500,000, this could accelerate your path to ownership.
However, compare it against other high-LTV deals (e.g., from building societies) and run affordability checks.
Always seek independent advice – mortgage rules are complex, and this product requires going through a Santander adviser or broker. HotMinute is a news website and not a financial adviser.
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