| First-time buyers with larger deposits can access better rates and improve affordability of repayments | Many buyers are still aiming for high loan-to-value mortgages due to smaller deposit availability | Some buyers are choosing to wait longer to save larger deposits and secure more competitive deals |
A two-tier system for FTB mortgages may be opening up, experts warn, as loan to value (LTV) ratios increasingly diverge between those with big and small deposits.
One in three first-time buyers actively seeking mortgages are looking for deals below 75% loan to value (LTV), research1 suggests. This means that they have deposits of at least 25%, or around £67,800 based on the average UK house price.
At the opposite end, three in 10 FTBs are looking for 90% LTV mortgages and one in eight are targeting 95% LTV – or a deposit between £13,560 and £21,120.
Stark difference
Having a larger deposit offers buyers a better chance of getting on the housing ladder. It also lowers the interest rate they will pay, which reduces monthly repayments.
Waiting it out?
For many FTBs, getting on the housing ladder at all is enough of a challenge. However, data suggest that more prospective buyers are now prepared to wait until they have a bigger deposit in order to access better rates: one in five first-timers had a deposit of 40% or more.
1Moneyfacts, 2026
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.