While higher loan-to-value (LTV) mortgages continue to dominate the first-time buyer market, new figures from Moneyfactscompare.co.uk reveal a surprising divide.
A significant number of new buyers are still seeking low LTV deals, hinting at growing financial support from families or other sources.
According to the data, almost one in three first-time buyers are searching for 90% LTV mortgages, and a further 10% are looking at 95% options—a clear sign that many are entering the market with modest 5-10% deposits. Based on the average UK house price of £272,995, that translates to between £13,650 and £27,300.
At the same time, almost one in five first-time buyers are targeting mortgages with 60% LTV or less. That would mean putting down a hefty 40% deposit, or roughly £110,000 on the average home – evidence of a distinct group of buyers in a far stronger financial position than most. Many are likely drawing on savings, investments, or family assistance to boost their deposits.
The figures also highlight a stark difference in costs between borrowers. Those with smaller deposits could be paying around £134 more each month than buyers with larger deposits, even when borrowing the same amount.
Meanwhile, existing homeowners appear to hit a crucial tipping point once they have built up around 25% equity in their property. Reaching that threshold seems to give many the confidence—or the financial flexibility—to make their next move up the housing ladder.
Together, the figures paint a picture of a first-time buyer market divided between those stretching to get a foothold with minimal deposits and those whose finances have been significantly bolstered by external support.
| 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% | 50% | 71% | 4.48% | £1,387 |
| 75% | 16% | 24% | 17% | 4.88% | £1,444 |
| 85% | 23% | 13% | 8% | 4.95% | £1,454 |
| 90% | 31% | 9% | 3% | 5.24% | £1,497 |
| 95% | 10% | 3% | 1% | 5.41% | £1,522 |
| Consumers comparing fixed term mortgage deals on moneyfactscompare.co.uk, 3 October to 2 November 2025, by borrower type and LTV. Average mortgage rates correct as at 31 October 2025.
*Assumed £250,000 borrowed over 25 years. Capital and interest repayment. Source: Moneyfacts Analyser |
|||||
Moneyfactscompare’s Adam French said: “First-time buyers in particular are feeling the weight of affordability pressures, with many relying on more expensive high LTV loans due to the challenges of raising a sizeable deposit. Meanwhile, more established homeowners who have accumulated greater equity, are in a better position to benefit from lower LTVs and more competitive mortgage rates.
“However, a significant proportion of first-time buyers are seeking mortgages at lower LTVs, suggesting that many are receiving significant financial support from family contributions or inheritance. This marks a growing divide in the housing market as those without additional financial assistance face greater financial strain, particularly as they are more vulnerable to rising rates or potential housing market corrections.”
