The introduction of Santander’s My First Mortgage, which allows buyers to purchase with a 2% deposit, has prompted online mortgage broker Mojo Mortgages to update its maximum LTV thresholds, enabling customers with minimal deposits to apply through its brokerage.

Mojo says the move reflects a broader shift in buyer behaviour, with high LTV borrowing becoming increasingly common among first-time buyers struggling to save larger deposits.

John Fraser-Tucker, head of mortgages at Mojo Mortgages, said: “From our perspective at Mojo Mortgages, this isn’t just another product; it’s a direct challenge to the rent trap that has stifled a generation of aspiring homeowners.

“The ability to access the market with a 2% deposit materially changes the options available to buyers who have strong incomes and credit profiles but have been unable to keep pace with rising house prices.”

THE SHIFT TOWARD HIGH LTYS

Mojo’s internal data points to a steady rise in demand for high LTV products. The proportion of its customers securing mortgages at 95% LTV or above rose from 7.7% in 2024 to 10.8% in 2025, increasing further to 12.4% in the first six weeks of 2026.

Fraser-Tucker said: “The percentage of people securing 95% mortgages rose from 7.7% in 2024 to 10.8% in 2025. This momentum has accelerated into 2026, with 95% LTV deals shifting to 12.4% in the first six weeks of the year alone.

“As the cost-of-living crisis continues to squeeze monthly disposable income, saving for a traditional 10% or 15% deposit has become increasingly unattainable for many.

“These figures serve as a clear indicator that buyers are now prioritising faster entry into the market over the long-term grind of saving, despite the premium rates often associated with high-LTV products.”

A MEANINGFUL STEP FOR THE SOLO SAVER

Fraser-Tucker says the product helps address a growing divide between buyers with family support and those saving alone.

“For years, the market has trended toward a two-tier system. On one side, you have buyers supported by the Bank of Family who can access lower rates through larger deposits.

“On the other hand, you have solo savers who, despite having strong salaries and impeccable credit, find themselves running a race where the finish line moves faster than they can save.

“By lowering the barrier to a minimum £10,000 deposit, this 98% offering bridges that gap. It allows buyers to pivot from paying a landlord’s mortgage to building their own equity years earlier than previously possible.”

THE AFFORDABILITY EQUATION

While the headline figure is the 2% deposit, Mojo says affordability assessments remain the critical factor for first-time buyers.

Fraser-Tucker explained: “Santander’s cap of 4.45x salary reminds us that while lenders are becoming more flexible on entry costs, they remain disciplined on ongoing sustainability.

“The easy cases are disappearing. Today’s market requires a broker who is part-analyst and part-strategist. Placing a first-time buyer in 2026 isn’t just about finding a product; it’s about navigating the gap between what a client earns and what a lender will provide in a high-inflation environment.”

WHAT THIS MEANS FOR THE 2026 MARKET

Mojo expects the move to increase competitive pressure across the high street, with other lenders likely to explore similar high LTV propositions.

The broker also anticipates increased activity in the resale market, as the product is aimed at existing housing stock rather than new-build homes.

Fraser-Tucker said: “A 5.19% rate at 98% LTV is a premium, but for many, the cost of the slightly higher interest rate is far lower than the cost of another two years in the rental market.”

LOOKING AHEAD

Fraser-Tucker added: “While 98% LTV deals help with the deposit, we still need to see continued evolution in income multiples and stress testing to truly unlock the market for those in high-cost areas like London and the South East.

“For now, Santander has handed a ladder to those who thought they were still years away from the first rung.”