On 3 February 2026, Santander UK announced the launch of a new mortgage product, My First Mortgage, aimed exclusively at first-time homebuyers. The programme allows borrowers to take out a mortgage covering up to 98% of a property’s value, equivalent to a minimum down payment of 2%.

📊 The product was introduced against the backdrop of a persistent housing affordability crisis in the UK. According to Santander’s estimates, 52% of potential first-time buyers refrain from purchasing a home due to an inability to save for a down payment.

In 2025, the average price of a first-time buyer home in England exceeded £290,000, which, under standard down-payment requirements of 5–10%, implies the need to accumulate £15,000–£30,000 in upfront capital—a significant barrier for many households.

🏦 My First Mortgage is a five-year fixed-rate mortgage with the following terms:

— Minimum down payment: from £10,000.
— Maximum loan size: £500,000.
— Loan-to-value ratio: up to 98%.
— Interest rate: approximately 5.19% per annum.
— Arrangement fee: none.
— Additional incentive: £250 cash back upon completion.

At the same time, Santander applies strict affordability criteria. The loan-to-income ratio is capped at around 4.4–4.5 times annual income, significantly limiting access to the highest loan amounts for borrowers on average incomes.

🧱 Despite the high level of leverage, the product is subject to several key restrictions:

— the mortgage is not available for flats, new-build properties, or homes in Northern Ireland;
— only second-hand detached or semi-detached houses are eligible;
— applications must be made exclusively via a mortgage adviser or broker.

The entry of a major retail bank into the segment of mortgages financing more than 95% of a property’s value is a rare development for the UK market since the 2008 financial crisis. Until now, similar products were either absent or offered primarily through government-backed guarantee schemes.

In this context, Santander’s move signals a cautious expansion of private-sector mortgage lending into higher-risk territory, without creating a mass-market solution. Analysts note that, given the strict income requirements and narrow property eligibility, the product’s impact on overall house price dynamics is likely to remain limited.