Santander launches 2% deposit 'My First Mortgage' fixed rate to get more first-time buyers onto the property ladder

by Aaron Strutt

Feb 02 2026

Santander UK has launched its lowest deposit mortgage for new customers, probably since the financial crash. The ‘My First Mortgage’ scheme enables borrowers with a 2% deposit or a minimum deposit of £10,000 to buy a property when they take its five-year fixed rate.  

‘My First Mortgage’ is available exclusively to first-time buyers, via a Santander mortgage adviser or mortgage brokers like Trinity Financial, and marks Santander’s latest step towards helping more would-be buyers onto the property ladder. Data from the lender shows that more than half (52%) of UK adults said they found saving money for a deposit to be the biggest barrier to buying a property.  

Key acceptance rules for new 'My First Mortgage'

• First-time buyer only, including joint mortgages.
• Maximum 98% loan-to-value (2% deposit).
• Minimum deposit £10,000.
• Maximum loan £500,000.
• Maximum term 40 years.
• Has to be taken on capital repayment not interest only.
• 5-year fixed rate. Early repayment charges apply.
• Gifted deposits accepted.
• No flats, new build or properties in Northern Ireland.

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. Lending above 95 and up to 98% is available on existing houses only, with data from the lender showing that two thirds of first-time buyers purchased a house in 2025. All lending remains subject to Santander’s broader affordability checks, including a maximum loan-to-income multiple of 4.45x salary. Customers looking to purchase a new build property or flat are able to continue to access borrowing up to a maximum 95% loan-to-value so you need 5% deposit.   

Aaron Strutt, product director at Trinity Financial, says: "It is great to see one of the bigger banks coming out with a low deposit scheme targeting first-time buyers with smaller deposits. 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.  

"Many of the lower deposit mortgages are available through smaller lenders and building societies and if you want one of these low deposit deals applicants normally have to lock into a fixed rate for five years. There are still lots of potential borrowers with good credit scores who are renting that want to get onto the property ladder and they are really struggling to save up a sufficiently large deposit, especially when they don't have access to the bank of Mum and Dad."

Will borrowers get stuck with this 98% mortgage?

When you come to the end of the five-year fixed deal some borrowers may well struggle to remortgage away to another lender, but Santander will probably offer them a new fixed rate rather than forcing them to revert to their expensive standard variable rate. Five years is quite a long time and if first time buyers are purchasing a house and they can pay a bit of the mortgage off they may well be able to switch lenders. House prices could also rise which may well help them get a cheaper remortgage rate.

If you do take a low deposit mortgage then it often makes sense to make overpayments and use the standard 10% overpayment facilities if possible to try and reduce the loan to value so it's closer to 90% or 95%. This is where lots of lenders have more competitively priced rates.

Most big lenders not offering new customers less than 5% deposit mortgages

Many of the big banks and building societies are offering income stretch mortgages or guarantor products but they have shied away from deals where borrowers need less than a 5% deposit. Santander’s new ‘my first home’ mortgage will mean it is offering similar schemes to the ones through Skipton, Yorkshire Building Society and April Mortgages. 

Lending solutions with Trinity Financial

Are you looking to buy a property and require expert advice? We’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience providing creative solutions to secure mortgages for our clients.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage or book a consultation or our appointment calendar

The information contained within was correct at the time of publication but is subject to change.

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