Santander UK has announced the launch of a new ultra-high loan-to-value mortgage designed to help first-time buyers onto the property ladder amid ongoing affordability challenges. The new deal, called “My First Mortgage”, allows eligible buyers to borrow up to 98% of a property’s value, significantly reducing the deposit needed to secure a home.
What Santander Is Offering
Under the new product:
- 📌 Loan-to-Value: Up to 98% LTV, meaning just a 2% deposit is required (minimum £10,000).
- 📌 Fixed Rate: Five-year fixed at 5.19% with no product fee and £250 cashback on completion.
- 📌 Property Price: Maximum purchase price capped at £500,000.
- 📌 Availability: Exclusively for first-time buyers, arranged via a Santander mortgage adviser or broker.
Santander has also confirmed that lending above 95% and up to 98% is available on existing houses only, with different criteria applying for flats and new builds. Borrowers remain subject to standard affordability checks, including income multiples of up to 4.45× salary.
Why This Matters
Saving for a deposit has long been cited as one of the biggest hurdles for aspiring homeowners. According to Santander’s internal data, the average first-time buyer deposit exceeded £85,000 in 2025, highlighting how challenging it has become for many to secure their first property.
By reducing the upfront deposit requirement, Santander hopes to accelerate buyers’ journeys to ownership — particularly for those who are priced out of traditional 95% LTV products and are currently stuck renting.
Industry Reaction
Mortgage market commentators have described the launch as a notable step in the high-LTV segment, adding to an expanding range of low-deposit options. An industry expert noted that while products at 98% LTV are becoming more common, the involvement of a major high street bank marks a shift in lender appetite and could encourage further competition in 2026.
However, some advisers emphasise that borrowers should plan carefully, particularly given the risk of negative equity if house prices fall and consider strategies such as overpayments to reduce the loan-to-value over time.
What This Means for Buyers
For many first-time buyers, this new Santander product could shorten the time it takes to save for a deposit, offering a potential route into homeownership sooner than previously possible. Yet it’s important to balance the benefits of lower upfront costs with longer-term affordability and market conditions.
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