A report published today revealed that mortgage advances to loan-to-value (LTVs) ratios of 90% or more rose from 8% to 8.4% between the first quarter of 2026 and the second.
The last time the Bank of England recorded the share of low-deposit mortgages this high was in the second quarter of 2008. In the same period in 2025, the share was 7%.
There are now more options for low deposit mortgages with many lenders recently entering the market with higher LTV products.
Examples include a £5k Lloyds deposit mortgage and a Santander 95% LTV mortgage. Meanwhile, building societies such as Skipton and Hanley Economic have launched ‘no deposit’ mortgages for tenants, while other lenders such as April have launched 100% mortgages.
But today’s figures also point to many mortgages with loan-to-value ratios of 90% or 95%, which are being issued to homebuyers with smaller deposits or equity.
Rachel Springall, Financial Expert at Moneyfactscompare.co.ukHe said data from the Bank of England highlighted the importance of low-deposit borrowing in the housing market.
“Saving a large deposit is a daunting task for many borrowers, so it is essential that lenders continue to adjust affordability standards fairly and create innovative products to help borrowers,” she said.
“Those who borrow at the highest levels of the loan-to-value spectrum should be warned of downside equity risks if home prices decline, so seeking good advice and making efforts to overpay for their mortgage is a wise choice.”
In a recent article for Mortgage Magazine, Chris Lee, former director of the Help to Buy programme, warned of the restrictions on low or no deposit mortgages. He said low-deposit mortgages were a good solution for some first-time buyers, but closing the deposit gap would have to come first. You can read his article, No Deposit Mortgage: 5 things FTBs should pay attention to here.
