Recently, Santander UK announced the launch of a new mortgage product offering up to 98% loan-to-value for first-time buyers. As the first major high-street lender to go beyond the traditional 95% limit, it’s an important development—and one that many buyers have been asking about.
So, what does this really mean for you?
A Boost for Buyers Struggling With Deposits
Here in South Wales, I speak to first-time buyers every week who can comfortably afford a mortgage payment but feel stuck because of deposit requirements. Saving 10% or even 5% can take years, especially with rising rents and living costs.
With this new product, buyers may only need a minimum deposit of £10,000, which could make homeownership achievable much sooner for some people. For many, that’s a real opportunity to move from renting into owning their first home.
The Other Side of High LTV Borrowing
While this product is positive in terms of access, it’s important to understand the risks.
At 98% LTV, you are starting with very little equity in your property. This means:
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You may be more exposed if house prices fall
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Remortgaging in future could be more limited
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Interest rates are usually higher at this level
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Your finances need to be well structured and stable
This isn’t about putting anyone off—it’s about making sure buyers go in with their eyes open and a long-term plan in place.
Who Is This Product Right For?
This type of mortgage may suit buyers who:
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Have strong, stable income
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Have good credit history
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Can comfortably afford the repayments
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Are planning to stay in the property long term
It won’t be suitable for everyone, and in many cases, a slightly larger deposit can still open the door to better rates and more flexibility.
That’s why proper advice is so important.
What This Says About the Housing Market
The fact that lenders are now offering 98% mortgages shows how challenging affordability remains across the UK. It reflects how difficult it has become for many people to save while renting.
At the same time, it shows that lenders are trying to adapt and support first-time buyers in practical ways.
Our Approach at Sturgess Mortgage Solutions
At Sturgess, our focus is always on finding the right solution for each client—not just the fastest one.
If you’re considering a high LTV mortgage, we’ll help you:
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Compare all available options
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Understand the long-term implications
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Stress-test affordability
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Plan your future remortgage strategy
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Protect your home and income
Our aim is to make sure your first purchase sets you up for long-term success, not short-term pressure.
Thinking About Buying Your First Home?
If you’re a first-time buyer in South Wales and wondering whether this type of mortgage could work for you, we’d be happy to talk it through.
Every situation is different, and the right advice can make all the difference.
Get in touch with the team and let’s start planning your route onto the property ladder—properly, and with confidence.
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