Those buying their first home or moving with smaller equity will benefit from the growing choice of higher loan-to-value (LTV) deals, which are mortgages that require lower deposits.
These are typically 90% LTV mortgages, which require a 10% deposit, and 95% LTV deals for those with 5% to take out.
According to new data from Moneyfacts, January saw an increase in LTV deals, with 90% LTV deals reaching a record high. Furthermore, the number of 95% LTV deals is at its highest level since March 2008, when the financial crisis began to materialize.
There are now 7,537 options available in this market – an increase of more than 1,000 from last year.
Rachel Springall, financial expert at Moneyfacts, said: “This year promises to be a fruitful one for first-time buyers, and they really need all the help they can get amid the lack of affordable housing.
“Despite mortgage rate volatility in recent weeks and a typical seasonal slowdown in activity that resulted in an increase in the average deal life to 33 days, the latest boost to product choice and sentiment towards easing stress tests will be encouraging news for borrowers.”
It is not only the mortgage choice that makes new buyers positive; several lenders have increased the amount they lend to customers.
For example, Nationwide now lends up to six times income to customers refinancing their mortgage or moving, up to an LTV of 95%.
“Lenders have been urged to do more to support first-time buyers to boost UK growth,” Springall said, “so any improvement should be welcomed. However, it is essential to seek advice before entering into any arrangement.”
What mortgage interest rate can starters get?
According to Moneyfacts, the typical two-year fixed rate on a 90% LTV mortgage is 5.10%, while on a five-year mortgage the average rate will be 5.09%.
For borrowers with a 5% down payment, the average two-year fix for 95% loans comes to 5.42%, while the five-year option is typically 5.41%.
Shaun Sturgess, director of Swansea-based Sturgess Mortgage Solutionssaid via agency Newspage: “2025 was a year of innovation for lenders and start-ups could benefit from this in 2026. In fact, that’s already happening.
“We are seeing very strong activity from first-time buyers and home movers, particularly in affordable areas around Swansea, Cardiff and in the Valleys, where value for money remains a big draw.
“There are now more loans available at higher loan values and if people are stuck for longer, they can often borrow more. 2026 will be the year when more ambitious starters finally get on the ladder and leave the rental market.”