Average mortgage loan-to-value hits a record as first-time buyers borrow bigger against shrinking downpayments
The average loan-to-value (LTV) on a core mortgage product has hit a record high of 79.31% — the highest since Moneyfacts began keeping electronic records in November 2011. Buyers are borrowing more relative to what they own, and lenders are expanding their offering to meet them.
The shift is not happening by accident. Affordability pressures, elevated house prices and the time it takes to build a meaningful deposit are pushing buyers — particularly first-time buyers (FTBs) — toward higher LTV options.
Lenders, keen to maintain volume in a sluggish market, are following.
What the data shows
The latest Moneyfacts UK Mortgage Trends Treasury Report, published at the start of November, shows product numbers at 95% LTV rising month-on-month to 474, while 90% LTV availability remained near recent highs at 900. Together, those two tiers now account for roughly a quarter of all core deals on the market.
At the same time, the number of products at 60% LTV — the tier used by buyers and remortgagors with significant equity — fell to 706, its lowest count since March 2024.
Rates at the low-deposit end have not softened to match demand. The average two-year fix at 95% LTV sits at 6.37%. This is above the 5.44% available to someone with a 40% deposit, with rates at 90% LTV not far behind at 6.19%.
The Moneyfacts Average New Mortgage Rate rose to 5.89% at the start of November — its highest point in three years, and up from 4.90% as recently as March.
A market under strain
The data points to a housing market adjusting to constraints rather than resolving them. The number of products at 95% and 90% LTV now makes up around a quarter of all core deals, but those deals come at a cost premium, and the buyers most likely to use them are already the most stretched.
According to ONS and UK Finance data cited in the report, the median LTV for FTBs in 2025 reached 85.6% — the highest since before the 2008 financial crisis. Income ratios have also risen, with buyers borrowing an average of 4.3 times their income, up from 3.7 times in 2006. The average age of FTBs is now around 33, up from 31 a decade ago, reflecting how long it takes to build a deposit now typically worth around 120% of gross annual income.
Many of those buyers are also bypassing starter homes altogether, going straight for larger properties. When entry-level homes sit idle or get absorbed by landlords, the natural flow of housing supply up the chain slows. Rachel Springall, finance expert at Moneyfacts, described this as a risk of "bottlenecking the wider market" — a structural problem that more mortgage products alone cannot fix.
Caught between rules and demand
Lenders are expanding high-LTV availability at a time when they are also navigating tighter affordability rules. Springall noted: "Lenders will need to work hard to loosen affordability barriers without increasing risk in line with new rules and continue to innovate products to help new buyers."
The Government's Your First Home scheme, which opens for pre-registration next month ahead of full applications in February 2027, offers an equity loan of 20% toward new-build purchases. Supporters describe that as a step in the right direction, but with rates at a three-year high, the question of how far it moves the needle on mortgage affordability is a live one.
Betting on a rate cut
Perhaps the most telling signal in the data is behavioural. Buyers are committing to larger loans at higher rates — which suggests they expect their financial position to improve, most likely through falling rates. Springall pointed to the future path of interest rates as a key factor shaping lender behaviour, noting that greater certainty on rate direction could bring fixed rates down before year end. For buyers locking in now at 95% LTV, that is the bet they are making.
