First-time buyers are being targeted with a new 2% deposit mortgage offer from Santander.
With a minimum deposit of £10,000, the mortgage is available for property purchases of between £190,000 and £500,000.
The ‘My First Mortgage’ deal from Santander is for a five-year fixed rate, and is not available for flats or new builds.
Zero deposit loans
It follows news last month that a new zero deposit mortgage aimed at renters was being launched.
The ‘Rent to Own’ home loan, now being offered by Hanley Economic Building Society, prompted some warnings from brokers that there was a risk of falling into negative equity with small movements in the property market.
Some advisers stressed it may be better to start with a deposit however small, or opt for shared ownership. Nationwide and Lloyds, for example, both offer 95% mortgages.
Key drivers
Skipton Building Society was the first in recent years to launch a 100% mortgage offer for renters back in 2023. It was followed by other lenders including April and Gable last year.
First-time buyers are set to be key drivers of the housing market in 2026, according to Nationwide.
The building society said the share of high loan-to-value lending — where buyers put down a deposit of 15% or less — is “reaching its highest level for over a decade”.
18-year high
The total number of mortgage offers is now at its highest since 2007 at more than 7,000, Moneyfacts recorded recently
There was an increase of 650 last year, and 90% and 95% loan-to-value (LTV) deals are now at a near 18-year high.
