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 Consuemr 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.”
