The figures indicate that around 30% of first-time buyers are focusing on 90% LTV mortgages, with a further 12% targeting 95% LTV loans

While higher loan-to-value (LTV) products continue to attract many first-time buyers, a sizeable minority are entering the market with materially larger deposits, according to new data from Moneyfacts.

The figures, based on users searching for fixed-rate products on price comparison website Moneyfactscompare.co.uk, indicate that around 30% of first-time buyers are focusing on 90% LTV mortgages, with a further 12% targeting 95% LTV loans. On an average UK property price of £271,188, this implies deposits in the region of 5% to 10%, or nearly £13,560 to £27,120.

At the same time, almost 31% of first-time buyers are looking for products below 75% LTV. On the same average price, a 25% deposit would be about £67,800, underlining the presence of a distinct group of new buyers coming to the market with stronger upfront capital positions.

The research suggests that the cost gap between low- and high-deposit borrowing remains significant. Moneyfactscompare.co.uk’s analysis indicates that customers with smaller deposits, or with limited equity in their existing property, could be paying around £174 more each month than borrowers able to access lower LTV bands for the same loan size.

The pattern extends beyond first-time buyers. Many existing owners appear to be waiting until they have accumulated at least 25% equity before moving home. The data show that roughly 69% of homemovers have reached this 25% equity threshold before trading up, with a further 16% looking to move once they have around 15% equity.

The widespread of first-time buyer LTV demand reflects a housing market increasingly shaped by unequal starting points, said Adam French, head of consumer finance at Moneyfactscompare.co.uk. While many first-time buyers are stretching themselves with 90–95% LTV mortgages due to deposit constraints, a notable minority are entering the market with substantial deposits, often helped by family support or inheritance.

The concern is that it is creating a two-tier market where buyers with higher deposits can access cheaper rates and lower monthly repayments, while others pay a hefty premium, he said.