- The new product requires a minimum £10,000 deposit
First-time buyers can now secure a mortgage with Santander with just a 2 per cent deposit, as long as it is not below £10,000.
It means an eligible buyer could purchase a £500,000 home with just a £10,000 deposit.
Santander’s ‘My First Mortgage’ product is a five-year fixed rate deal, with a rate of 5.19 per cent, zero product fee and £250 cashback.
Someone buying a £500,000 property with a £490,000 mortgage could expect to pay £2,689 a month if repaying the whole loan over a 30 year period.
The product is available exclusively to first-time buyers, via Santander mortgage advisers or mortgage brokers.
The new product requires a minimum £10,000 deposit, with maximum lending up to £500,000 repayable over a term of between five and 40 years.
Santander’s new deal is a five-year fixed rate mortgage product, with a rate of 5.19%, zero product fee and £250 cashback
Mortgages that cover above 95 per cent of a home’s value are only available on existing houses only. So not new builds or flats.
Santander is hopeful that the mortgage product could prove popular among first-time buyers.
More than half of adults said they found saving money for a deposit to be the biggest barrier to buying a property, according to data from the lender.
Its internal data also shows that two thirds of first-time buyers purchased a house in 2025, rather than a flat.
All lending remains subject to Santander’s broader affordability checks, including a maximum loan to income multiple of 4.45 times gross salary.
It means someone buying alone with a £50,000 salary won’t be able to borrow more than £222,500.
Those looking to buy a new build property or flat are able to continue to access borrowing that covers up to 95 per cent of the property’s value.
The bank says it is prepared to accept gifted deposits from family members and consider lending up to 5.5 times income.
David Morris, head of homes for Santander UK said: ‘We know that saving for a deposit remains one of the biggest hurdles to homeownership.
‘Last year, the average first-time buyer with Santander put down a deposit of more than £85,0003, a figure that can feel unattainable for today’s aspiring homeowners, whether that’s a result of more modest income, limited family financial support, rising rental costs, and in some cases childcare expenses.
‘We want to help more people benefit from the stability and sense of pride that owning a home brings, while maintaining our position as a responsible lender.’
In terms of how Santander’s low deposit mortgage compares with the rest of the market, there are some cost savings advantages for those prepared to save up a 5 per cent deposit before buying.
For those that do, Skipton has 4.52 per cent two-year fix and Clydesdale Bank has a 4.54 per cent five-year year fix – both offered exclusively via mortgage brokers.
‘It is great to see one of the bigger banks coming out with a low deposit scheme targeting first time buyers with smaller deposits,’ says Aaron Strutt of broker Trinity Financial.
‘There is a reasonable amount of choice in this part of the mortgage market now which means you do not need a huge deposit to buy a property anymore.
‘The rate is not amazing, but it is not bad. For many the mortgage repayments would probably be cheaper than renting especially if they take a longer term so I suspect this will be a popular product.
‘Many of the Big banks and building societies are offering income stretch mortgages or guarantor mortgages but they have shied away from deals where borrowers need less than a 5 per cent deposit.
‘Santander’s new ‘my first mortgage’ product will mean it is offering similar schemes to the ones through Skipton, Yorkshire Building Society and April.’
With low deposit mortgage deals the fear is always that if house prices were to fall, then it may leave someone at risk of negative equity and unable to remortgage to a different lender or move home.
Negative equity is when the value of a house falls below the amount left to pay on the mortgage, which is easier to do when only a small deposit has been put down.
However, Strutt has some suggestions for borrowers to avoid falling foul of this.
‘If you do take a low deposit mortgage then it often makes sense to make overpayments and use the standard 10 per cent overpayment facilities if possible to try and reduce the loan to value so it’s closer to 90 per cent or 95 per cent. This is where lots of lenders have more competitively priced rates.’