Santander launches new 2% deposit mortgage for first-time patrons

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Your assist makes all of the distinction. Learn extra A significant financial institution has launched a brand new mortgage product designed to assist some first-time patrons onto the property ladder with a deposit of simply 2 per cent.

The deal, from Santander UK, does nonetheless mandate a minimal £10,000 deposit. This implies a 2 per cent contribution is barely viable for a £500,000 house.

Santander UK mentioned its "my first mortgage" deal encompasses a fastened charge of 5.19 per cent over 5 years and has no product payment.

The product, at as much as 98 per cent loan-to-value (LTV), is offered for max lending as much as £500,000, repayable over a time period of between 5 and 40 years.

Santander confirmed the deal just isn't open to self-employed candidates and covers solely these residing in Britain, with Northern Eire excluded.

Lending above 95 per cent and as much as 98 per cent LTV is restricted to present homes solely, Santander mentioned. A minimal of £190,001 have to be borrowed, and a £250 cashback is offered upon completion.

<img src="https://static.independent.co.uk/2026/02/03/12/d3eea6ff0d731f6aeb56eb46e5461e5bY29udGVudHNlYXJjaGFwaSwxNzcwMjAyOTQw-2.22229531.jpg" srcset="https://static.independent.co.uk/2026/02/03/12/d3eea6ff0d731f6aeb56eb46e5461e5bY29udGVudHNlYXJjaGFwaSwxNzcwMjAyOTQw-2.22229531.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/02/03/12/d3eea6ff0d731f6aeb56eb46e5461e5bY29udGVudHNlYXJjaGFwaSwxNzcwMjAyOTQw-2.22229531.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Last year, the average first-time buyer with Santander put down a deposit of more than £85,000, the bank said" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Final yr, the typical first-time purchaser with Santander put down a deposit of greater than £85,000, the financial institution mentioned (Laura Lean/PA) All lending additionally stays topic to Santander’s broader affordability checks, together with a most loan-to-income a number of of 4.45 occasions wage.

Prospects seeking to buy a brand new construct house can nonetheless entry borrowing from Santander as much as a most 95 per cent LTV.

David Morris, head of houses for Santander UK mentioned that saving for a deposit “stays one of many greatest hurdles to homeownership”.

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He mentioned: “Final yr, the typical first-time purchaser with Santander put down a deposit of greater than £85,000, a determine that may really feel unattainable for immediately’s aspiring owners, whether or not that’s a results of extra modest revenue, restricted household monetary assist, rising rental prices, and in some instances childcare bills.”

Rachel Springall, a finance professional at Moneyfactscompare.co.uk, mentioned debtors ought to search recommendation as a primary step.

<img src="https://static.independent.co.uk/2026/01/08/07/67708a708cf9f679e15ca0fd9e191bffY29udGVudHNlYXJjaGFwaSwxNzY3OTQ0MzY4-2.21754240.jpg" srcset="https://static.independent.co.uk/2026/01/08/07/67708a708cf9f679e15ca0fd9e191bffY29udGVudHNlYXJjaGFwaSwxNzY3OTQ0MzY4-2.21754240.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/01/08/07/67708a708cf9f679e15ca0fd9e191bffY29udGVudHNlYXJjaGFwaSwxNzY3OTQ0MzY4-2.21754240.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="All lending also remains subject to Santander’s broader affordability checks, including a maximum loan-to-income multiple of 4.45 times salary" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

All lending additionally stays topic to Santander’s broader affordability checks, together with a most loan-to-income a number of of 4.45 occasions wage (PA Archive) She mentioned: “Debtors might need assistance to discover a cope with a extra enhanced loan-to-income ratio, like Nationwide who can provide six occasions somebody’s revenue.

“Exterior of an enormous excessive avenue financial institution, it's price noting that constructing societies have been working exhausting to assist new patrons, main the cost to supply extra revolutionary merchandise.

“These embrace the ‘observe file mortgage’ from Skipton Constructing Society, the ‘serving to hand’ provide from Nationwide and the ‘hire to personal’ mortgage from Hanley Constructing Society.

“Innovation is about to turn into a key speaking level this yr, as increasing choices for first-time patrons and modernising regulation are among the key themes to be reviewed by the Monetary Conduct Authority.”