Santander UK has launched a new five-year fixed mortgage at 98% loan-to-value aimed at helping first-time buyers with smaller deposits onto the property ladder.

The new product, branded My First Mortgage, is priced at 5.19% and comes with no product fee and £250 cashback.

It is available exclusively to first-time buyers through mortgage brokers or Santander mortgage advisers.

Santander said the launch reflects the ongoing challenge many aspiring homeowners face in building a deposit, with more than half of UK adults identifying saving for a deposit as the biggest barrier to buying a home.

My First Mortgage requires a minimum deposit of £10,000, with maximum lending of up to £500,000. Loans can be taken over a term of between five and 40 years. Lending above 95% and up to 98% loan-to-value is available on existing houses only, with Santander data showing that around two thirds of first-time buyers bought a house in 2025.

Borrowers purchasing new build properties or flats can continue to access mortgages up to a maximum of 95% loan-to-value. All applications remain subject to Santander’s standard affordability assessments, including a maximum loan-to-income multiple of 4.45 times salary.

David Morris, head of homes for Santander UK, said: “We know that saving for a deposit remains one of the biggest hurdles to homeownership.

“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, whether that’s a result of more modest income, limited family financial support, rising rental costs, and in some cases childcare expenses.

“We want to help more people benefit from the stability and sense of pride that owning a home brings, while maintaining our position as a responsible lender.

“My First Mortgage does just that, offering the chance to speed up the time to ownership with the reassurance that the buyer has received specialist mortgage advice and will have certainty of what they are expected to pay, every month, for the next five years.”

SUPPORT FOR FIRST-TIME BUYERS

Alongside the new product, Santander said it continues to support first-time buyers through a range of measures, including offering mortgages of up to 95% loan-to-value on new build houses and all flats, accepting gifted deposits from family members, allowing borrowing of up to 5.5 times income in certain cases, and providing free standard valuations on most mortgages.

David Hollingworth, associate director at L&C Mortgages, said: “This is an important addition from a major lender, adding to the growing ranks of mortgages designed to ease the struggles of first-time buyers.

“There’s an increasingly healthy range of mortgages for those with little or no deposit.

“These products do carry eligibility requirements so won’t fit everyone’s requirements and a bigger deposit will still offer a wider choice with lower rates. However, the new Santander deal should help more to access homeownership sooner than they may have thought possible.”