While higher loan-to-value (LTV) mortgages dominate first-time buyer demand a significant minority are seeking higher deposit deals, fresh data from Moneyfacts can reveal.
Among first-time buyers searching for fixed-rate mortgages on the comparison site, 30% are opting for 90% LTV products, with a further 12% looking at 95% LTV deals, indicating that many buyers are relying on deposits of between 5% and 10%. Based on the average UK house price of £271,188, this equates to deposits of between £13,560 and £27,120.
At the same time, 31% of first-time buyers are searching for mortgages with loan-to-value ratios below 75%, suggesting a notable proportion are entering the market with deposits of at least 25%. On an average-priced home, this would require a deposit of around £67,800.
The data also shows a clear cost gap between buyers with smaller and larger deposits, with those borrowing at higher LTVs potentially paying around £174 more per month than borrowers with greater equity borrowing the same amount.
Among home movers, equity levels remain an important factor, with 69% waiting until they have at least 25% equity before moving, while a further 16% look to progress with around 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 Moneyfacts, 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.”
Fun fact…
When I was looking for a remortgage recently, I wanted to know what the difference in monthly payments would be if I had 20% equity, 25% equity and so on.
I wonder how many first-time buyers do the same thing…?
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Why is it when ministers or property professionals give statistics for first time buyers they quote average property prices instead of the price for a one bed or 2 bed flat that a first time buyer would be likely to want to buy? 1st time buyers are put off and Government policy is distorted.
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