First-time buyers and borrowers with small deposits are entering 2026 with more mortgage choice than at any point in almost two decades according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
The data shows a sharp uplift in higher loan-to-value (LTV) lending during January, with the number of 90% LTV mortgage deals reaching a record high. Availability at 95% LTV also rose, hitting its strongest level since March 2008, shortly after Moneyfacts began electronically tracking LTV choice in 2007.
Overall mortgage product choice increased month-on-month to 7,537 deals, more than 1,000 higher than a year ago. Moneyfacts says the improvement will be particularly welcome for first-time buyers and those with limited equity looking to remortgage.
Mortgage activity slowed seasonally at the start of the year, pushing the average shelf-life of a deal up to 33 days. At the same time, fixed mortgage rates edged higher for the first time since October 2025. Average 2-year fixed rates rose to 4.85%, while 5-year fixes increased to 4.94%. The overall average mortgage rate now stands at 4.90%, down significantly from 5.45% a year ago.
FALLING RATES
Tracker rates continued to fall, helped by recent Bank of England base rate cuts, with the average two-year tracker dropping to 4.41%. Standard variable rates (SVRs) also eased to an average of 7.15%, intensifying the incentive for remortgage customers to switch away from reversion rates.
Rachel Springall, finance expert at Moneyfacts, says: “This year is setting itself up to be a fruitful one for first-time buyers… the latest boost to product choice and sentiment towards relaxing stress tests will be encouraging news to borrowers.”
She adds that 90% LTV mortgages now account for 13% of the residential market, with choice at both 90% and 95% LTV improving month-on-month.
“While a helpful boost, there is much more room for improvement to improve choice and competition at the higher LTV spectrum,” Springall says.
Moneyfacts also highlighted recent moves by lenders to review loan-to-income limits, which could further improve affordability prospects for new buyers as regulatory scrutiny of mortgage lending intensifies this year.
WELCOME BOOST
Mary-Lou Press, NAEA Propertymark President, says: “The increase in higher loan-to-value mortgage products is a welcome and much-needed boost for first-time buyers, many of whom continue to face significant affordability pressures.
“Greater choice at 90% and 95% LTV, alongside signs of more flexible lending criteria, should help more people take their first step onto the property ladder.
“However, improved access to finance must be matched by action to increase the supply of genuinely affordable homes. Without addressing the chronic shortage of housing, particularly in areas of high demand, many aspiring buyers will still struggle despite these positive developments in the mortgage market.”
