One in three mortgage hunting FTBs has at least 25% deposit
While higher loan-to-value (LTV) mortgages dominate first-time buyer demand a significant minority are seeking higher deposit deals, fresh data from Moneyfactscompare.co.uk can reveal.
Of those looking for fixed term deals on moneyfactscompare.co.uk:
- Almost one in three (30%) first-time buyers are opting for 90% LTV mortgages, and a further 12% are looking at 95% LTV options. This hints at many first-time buyers relying on 5-10% deposits. This translates to £13,560 to £27,120 at the average UK house price of £271,188.
- Almost one in three (31%) first-time buyers are seeking mortgages with sub-75% LTVs. For context, a 25% deposit on the average UK house price would require a deposit of around £67,800, highlighting that there is a distinct group of first-time buyers in a favourable financial position.
- Borrowers with smaller deposits, or those who have accumulated less equity, could be paying £174 more per month more compared to those with a larger deposit or equity to borrow the same amount.
- Many homemovers want at least 25% equity before making their next move on the housing ladder. Around two-thirds of homeowners (69%) hit this threshold before progressing to a new property, with a further one in seven (16%), looking to move with 15% equity.
| Consumer demand for fixed rate mortgages by LTV | |||||
| Max Loan-to-Value (LTV) | First-time buyers | Second-time buyers | Remortgage | Moneyfacts Average Mortgage Rate (2-year fix) | Monthly mortgage repayment* |
| 60% | 17% | 47% | 68% | 4.21% | £1,349 |
| 75% | 14% | 22% | 19% | 4.74% | £1,424 |
| 85% | 23% | 16% | 10% | 4.83% | £1,437 |
| 90% | 30% | 11% | 2% | 5.10% | £1,476 |
| 95% | 12% | 3% | 1% | 5.42% | £1,523 |
Consumers comparing fixed term mortgage deals on moneyfactscompare.co.uk, 1-30 January 2026, by borrower type and LTV. Average mortgage rates correct as at 30 January 2026.
*Assumed £250,000 borrowed over 25 years. Capital and interest repayment.
Source: Moneyfacts Analyser
Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, said:
“The widespread of first-time buyer LTV demand reflects a housing market increasingly shaped by unequal starting points. While many first-time buyers are stretching themselves with 90–95% LTV mortgages due to deposit constraints, a notable minority are entering the market with substantial deposits, often helped by family support or inheritance.
“The concern is that it is creating a two-tier market where buyers with higher deposits can access cheaper rates and lower monthly repayments, while others pay a hefty premium. For second-time buyers and remortgage customers, the data shows equity remains king, with most waiting to build at least 25% equity. Although wise buyers should note that materially cheaper average rates kick in at around 15% equity.”
Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents) comments:
“There is a growing divide facing people trying to get onto, and move up, the housing ladder. While it’s encouraging that a proportion of first-time buyers are able to enter the market with larger deposits, the reality for many is that high house prices and the cost of living make saving 20–25% simply unattainable without additional support.
“This is creating a two-tier system where those with access to family assistance or inherited wealth can benefit from lower mortgage rates and more choice, while others are forced into higher loan-to-value products with significantly higher monthly repayments.
“To level the playing field, we need sustained action to boost housing supply and build the right homes in the right places, alongside targeted support for first-time buyers to help them save and access affordable finance. Without this, homeownership risks becoming increasingly out of reach for many aspiring buyers, particularly younger households and those without financial backing.”
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