A positive start to 2026
It’s great news for first-time buyers in 2026, as competition between lenders is driving new mortgage options and improving affordability. After years of saving challenges and high rates, those planning to buy their first home now have more reason to feel positive.
New 98% LTV mortgage from Santander
Santander has just launched a 98% loan-to-value (LTV) mortgage fixed for five years at 5.19%, designed especially for first-time buyers. It requires only a £10,000 deposit, and other lenders are expected to follow with similar deals. This growing competition could make it easier than before to get on the property ladder.
Higher income multiples on offer
Some banks are also offering to lend up to six times a buyer’s salary, helping people borrow enough to secure a suitable home. With rates beginning to ease and choice growing, first-time buyers are gaining momentum again.
A bigger deposit means more choice
Data from Moneyfacts shows that those with just a 5% deposit can now choose from almost 400 mortgage products, with rates between 4.2% and 6%. Increase the deposit to 10%, and the number jumps to more than 900 deals, starting from around 3.78%. It’s clear that even a small boost in savings can open up far more options.
The rise of the Bank of Family
That’s one reason why the Bank of Family—parents and grandparents helping younger buyers—is expected to play an even bigger role this year. Many are supporting first-time buyers by topping up deposits through property wealth or lifetime mortgages, allowing loved ones to benefit from lower LTVs and improved rates.
Using housing wealth to help the next generation
According to Key Partnerships, nearly two-thirds of equity release customers now use their funds for several purposes, including helping family members purchase property. The average amount released last year was £123,174—enough to make a real difference to first-home savings.
Making deposits more achievable
Santander’s data shows the average first-time buyer deposit in 2025 was £85,000. That’s a big target, but combining personal savings with family support can make it far more achievable. Even a partial gift can help reduce monthly repayments and improve affordability over time.
Expert insight on the growing trend
Key Partnerships’ Damon O’Connell says lenders and advisers are recognising how important the first-time buyer market has become. By exploring how family wealth can be used thoughtfully, advisers are helping multiple generations reach their property goals together.
Falling payments bring more optimism
And there’s even more positive news. Average monthly mortgage payments for first-time buyers in January were £119 lower than a year earlier — a sign that the market is starting to turn in buyers’ favour.
A brighter year ahead for first-time buyers
As lenders continue to compete and families find new ways to work together, first-time buyers have every reason to feel optimistic about the year ahead.
Please note: This blog is for general information only and does not constitute financial advice.