The mortgage landscape for first-time buyers (FTBs) has long been defined by a single, daunting mountain: the deposit. While monthly affordability is often manageable for those already paying high private rents, scraping together a 5% or 10% lump sum has remained the ultimate roadblock. Santander’s launch of its 98% LTV ‘My First Mortgage’, allowing entry with just a 2% deposit, is a significant structural shift.
In line with this 98% mortgage offering, Mojo Mortgages has updated its maximum LTV thresholds. This ensures that aspiring homeowners looking to secure a mortgage with just a 2% deposit can now apply and receive expert guidance through Mojo’s brokerage services.
“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,” states John Fraser-Tucker, Head of Mortgages at online mortgage broker, Mojo Mortgages.
The Shift Toward High LTVs
This move comes at a time when high-LTV lending is becoming the new “normal” for the UK’s aspiring homeowners. Mojo Mortgages in-house data shows a clear upward trajectory:
| Year | Percentage of Mojo FTB customers securing 95% LTV or higher |
| 2024 | 7.7% |
| 2025 | 10.8% |
| 2026 so far | 12.4% |
“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
“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 (the house price) 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 2% deposit is the headline, the real story for 2026 is affordability. Even with a small deposit, buyers must still pass rigorous stress tests. “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.” states Fraser-Tucker.
What This Means for the 2026 Market
“We expect this move to trigger a ripple effect across the high-street:
- Increased Competition: “Other major lenders are likely to follow suit with innovative high-LTV products to capture the surging FTB demand.”
- Focus on Existing Stock: “As this specific product targets existing houses rather than new builds, we may see a boost in activity for “second-hand” starter homes.”
- Rate vs. Reality: “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
The stage is set for a “booming” 2026 in the mortgage market, but the work isn’t done. Fraser-Tucker adds “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.”
