Santander has unveiled a new high loan-to-value mortgage aimed squarely at helping first-time buyers overcome one of the biggest hurdles to homeownership…saving for a deposit. The new product, called My First Mortgage, offers borrowing of up to 98% loan to value (LTV) on a five-year fixed rate at 5.19%, with no product fee and £250 cashback. The mortgage is available exclusively to first-time buyers and can be accessed through mortgage brokers.
A Boost for Buyers Struggling With Deposits
According to Santander’s own research, 52% of UK adults say saving for a deposit is the biggest barrier to buying a home. By allowing buyers to put down as little as 2%, Santander’s latest move significantly lowers the upfront cost of getting onto the property ladder. The mortgage requires a minimum deposit of £10,000, with maximum lending capped at £500,000. Borrowers can choose a mortgage term of between five and 40 years, offering flexibility for different affordability needs.
However, lending above 95% and up to 98% LTV is only available on existing houses. Buyers purchasing new-build properties or flats will still be limited to a maximum of 95% LTV.
Affordability and Eligibility Criteria
While the product opens the door to higher borrowing, Santander has confirmed that all applications will remain subject to its standard affordability checks. This includes a maximum loan-to-income (LTI) multiple of 4.45x salary, ensuring lending remains responsible despite the higher LTV.
The product is exclusively for first-time buyers and is only available via mortgage intermediaries, reinforcing the importance of professional advice when navigating higher LTV borrowing.
What This Means for the First-Time Buyer Market
The launch of Santander’s 98% LTV mortgage comes at a time when lenders are under increasing pressure to support first-time buyers, particularly in areas where high rents make saving difficult. By reducing the deposit requirement while keeping a competitive fixed rate and removing product fees, Santander is positioning My First Mortgage as a practical stepping stone into homeownership rather than a short-term incentive.
Louis Mason, Head of Marketing and Communications at Oportfolio Mortgages, welcomed the announcement:
“A 98% LTV mortgage from a major high street lender like Santander is a genuinely meaningful step for first-time buyers who are stuck renting and struggling to save. While affordability checks still apply, this product could make homeownership achievable much sooner for buyers with strong incomes but limited savings. As always, expert mortgage advice is crucial to ensure this type of borrowing is right for your long-term plans.”
The Importance of Mortgage Advice
High LTV mortgages can be an excellent solution for the right buyer, but they’re not suitable for everyone. Speaking to a mortgage adviser allows first-time buyers to understand how products like Santander’s My First Mortgage compare to other options on the market, including whether alternative schemes or lower-risk products may be more appropriate.
If you or anyone you know is looking to buy their first home, and wants to explore their options, then please feel free to give our first-time buyer mortgage advisers a call today. We are here to help!
