Santander has announced a significant new mortgage product aimed at helping thousands of first-time buyers overcome one of the biggest barriers to homeownership: the deposit. The bank is launching a five-year, 98% loan-to-value (LTV) mortgage, which requires a minimum deposit of just £10,000.
Exclusive Offer for First-Time Buyers
This new mortgage, branded as My First Mortgage, is available exclusively to first-time buyers. It can be accessed only through a Santander mortgage adviser or an authorised mortgage broker, ensuring that applicants receive specialist advice tailored to their circumstances.
Key Features of the Mortgage
The product allows for maximum lending of up to £500,000, with repayment terms ranging from five to 40 years. However, there are important conditions to note:
- Lending above 95% and up to 98% is restricted to existing houses only, not new builds or flats.
- For new build properties or flats, borrowing is capped at a maximum of 95% LTV.
- All applications remain subject to Santander's standard affordability checks, including a maximum loan-to-income multiple of 4.45 times the applicant's salary.
Addressing the Deposit Hurdle
David Morris, Head of Homes for Santander UK, highlighted the challenges faced by aspiring homeowners. "We know that saving for a deposit remains one of the biggest hurdles to homeownership," he said. "Last year, the average first-time buyer with Santander put down a deposit of more than £85,000, a figure that can feel unattainable for today's aspiring homeowners."
He attributed this difficulty to factors such as modest incomes, limited family financial support, rising rental costs, and childcare expenses. The new mortgage aims to provide a solution by reducing the initial deposit requirement, thereby accelerating the path to ownership.
Additional Benefits and Flexibility
Alongside the 98% mortgage, Santander is enhancing its offerings with several supportive features:
- The bank is accepting gifted deposits from family members, which can further ease the financial burden on first-time buyers.
- Customers may be able to access borrowing up to 5.5 times their income, subject to affordability assessments.
- Mortgage applications can include up to four applicants (direct only) to improve overall affordability.
- A free standard valuation is offered on most mortgages, reducing upfront costs.
A Responsible Lending Approach
Santander emphasises that this initiative is designed to maintain its position as a responsible lender. By providing certainty in monthly payments for the first five years and ensuring specialist advice is given, the bank aims to help more people achieve the stability and pride associated with homeownership without compromising financial security.
This move comes as data from the lender shows that two-thirds of first-time buyers purchased existing houses in 2025, underscoring the potential demand for such products in the current housing market.
