FIRST-TIME BUYERS and those with little equity to refinance will find greater mortgage choice in 2026, new research from Moneyfacts has found. Brokers agreed, saying a more positive outlook for rates and lender innovation around affordability are helping more borrowers onto the property ladder.
During January, there was an uplift in higher loan to value (LTV) deals, with 90% LTV options at a record-high, plus a boost to 95% LTV deals, which are at their highest count since March 2008.
Product choice overall rose month-on-month, to 7,537 options. Year-on-year, there are now over 1,000 more deals available.
Fixed mortgage rates rose for the first time since October 2025. The average two- and five-year fixed mortgage rates rose by 0.02% and 0.03% respectively month-on-month, to stand at 4.85% and 4.94% respectively.
The Moneyfacts Average Mortgage Rate rose to 4.90% month-on-month from 4.87%. Year-on-year the rate is down by 0.55%, from 5.45% in February 2025.
Fruitful for first-time buyers
Rachel Springall, Finance Expert at Moneyfacts, said: “This year is setting itself up to be a fruitful one for first-time buyers, and really, they need all the help they can get amid the lack of affordable housing.
“Despite the volatility in mortgage rates over recent weeks, and a typical seasonal slowdown in activity that resulted in a rise to the average shelf-life of a deal to 33 days, the latest boost to product choice and sentiment towards relaxing stress tests will be encouraging news to borrowers.
“Mortgages at the 90% loan-to-value (LTV) tier now represent a 13% proportion of the residential mortgage market, with 95% LTV deals representing a small fraction of just 7%.
“The number of options in both of these sectors rose month-on-month, which has led to a record-high count in the number of deals available to borrowers with a 10% deposit or equity.”
Year of innovation
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, agreed that things are looking positive for first-time buyers.
He said: “2025 was a year of innovation for lenders and first-time buyers could benefit in 2026 as a result. In fact, that’s already happening.
“We are seeing really strong activity from first-time buyers and home movers, particularly in affordable areas around Swansea, Cardiff and in the Valleys, where value for money remains a major draw.
“There are now more loans available at higher loan-to-values and, if people lock in for longer, they can often borrow more. 2026 is shaping up to be the year more aspiring first-time buyers finally get onto the ladder and out of the rental market.”
Omer Mehmet, Managing Director at Welling-based Trinity Finance, was also positive: “The mortgage market is definitely moving in the right direction for first-time buyers. Lenders have been looking at all kinds of ways to help boost affordability and the result is more choice for those seeking to buy their first home.
“Better still, we’re expecting mortgage rates to start to edge down again as the Bank of England believes inflation will soon be under control and, if it is, said it will cut rates. Overall, things are looking positive right now.”
Negative equity risk warning
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said mortgage lenders are relaxing affordability and deposit requirements, making buying that first home or upsizing more achievable.
But he cautioned: “The abundance of choice makes obtaining professional advice to find the most suitable and cost-effective mortgage all the more crucial.
“There is also slight concern that lending larger amounts at higher loan to values could increase defaults and chances of negative equity, and lenders need to be careful of not creating another 2008 market crash.”
Coventry cuts
Last week, Coventry Building Society was one such lender to reduce its rates at higher 90% and 95% LTVs.
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, said “This is a potential game-changer for first-time buyers who have been squeezed by higher costs”.
He continued: “To sweeten the deal further, they are offering £500 cashback on selected products. It’s a bit like having an air freshener chucked in the car after a car wash — a small but delightful extra that makes the whole experience feel that much fresher.
“If you’ve been waiting for a green light to move, this could be the signal you need.”
Photo by Shamblen Studios on Unsplash
