How much more can first-time buyers borrow in 2026?

First-time buyers can now borrow up to £40,000 more than they could a year ago. Research by Mortgage Advice Bureau attributes the increase to eased affordability stress tests, improved lender flexibility and higher income multiples across the market.

Why has first-time buyer borrowing power increased?

Three changes have combined to boost borrowing power: lenders have relaxed their affordability stress tests, market conditions have shifted in buyers' favour, and major lenders such as Nationwide now offer up to six times income at up to 95% loan-to-value.

What is the Halifax £5,000 deposit mortgage?

Launched in May 2026 by Lloyds, Halifax and Bank of Scotland, the £5,000 deposit mortgage is a five-year fixed product aimed at first-time buyers. It is available on homes worth up to £300,000 and is designed for renters who can manage monthly payments but struggle to save a large deposit.

Why do half of first-time buyers underestimate their borrowing power?

A Mortgage Advice Bureau survey of 1,000 aspiring buyers found 50% were unaware that lending rules had relaxed over the past year. Many continue making decisions based on figures they researched months ago, missing properties they would now qualify for.

What are current 95% LTV mortgage rates for first-time buyers?

Average two-year fixes at 95% loan-to-value sit at around 5.42%, with five-year fixes at roughly 5.41%. Locking in for longer can also unlock a larger maximum loan with some lenders.

What should first-time buyers do to check their borrowing power?

Buyers should request a fresh affordability assessment from a qualified mortgage adviser, compare lenders rather than relying on a single high street bank, and explore higher income multiples now available. Lifetime ISAs offering a 25% government bonus on savings up to £4,000 a year are also worth considering.

First-Time Buyer Borrowing Jumps £40k

June 2, 2026

First-Time Buyer Borrowing Jumps £40,000

First-time buyer borrowing has jumped by up to £40,000 in a year – but half of aspiring homeowners have no idea it happened. Yet half of them have no idea, according to new research from the Mortgage Advice Bureau.

MAB surveyed 1,000 aspiring homeowners. Around 50% had missed the shift in lending rules entirely. That gap between perception and reality is keeping people stuck renting when they could be buying.

What Has Actually Changed?

A few things shifted at once. Lenders eased their affordability stress tests, with recent changes to borrowing criteria opening up larger loans across the market. Market conditions moved a little in buyers’ favour. Several big names also bumped up the income multiples they will lend against.

Nationwide is a good example. It now lends up to six times income to home movers and remortgage customers, at up to 95% loan-to-value. Multiply that across the market and the same salary suddenly stretches a lot further on paper.

The £30,000 to £40,000 Uplift

MAB reckons some buyers can access £30,000 to £40,000 more than last year on identical earnings. Nothing about the buyer has changed. The lending maths around them has.

First-Time Buyer Borrowing: Why the Awareness Gap Matters

Half of those surveyed were still working from last year’s numbers. Some had quietly given up on the idea of buying altogether. Plenty more were searching for properties in a price bracket below what they actually qualify for.

Old Numbers, Missed Homes

Take a buyer who was capped at £200,000 last spring. The same person might now stretch to £240,000 without earning a penny more. That is the difference between a flat on the edge of town and a small house closer in.

The catch is simple. None of it counts if buyers do not check.

How High Street Lenders Are Boosting First-Time Buyer Borrowing

Some of the biggest names have started competing harder for first-time buyer business. Lloyds, Halifax and Bank of Scotland launched a mortgage this month aimed squarely at renters struggling to save. The deposit requirement is £5,000.

Halifax’s £5,000 Deposit Deal

The product is designed for people who can manage monthly payments but cannot pull together a five-figure deposit. Amanda Bryden, who heads Halifax Intermediaries and Scottish Widows Bank, said there are now so many options that buyers regularly underestimate what they can do.

Her advice was straightforward. Anyone thinking about buying should speak to a mortgage adviser sooner rather than later.

The Wider 2026 Picture

The 95% LTV market is more competitive than it has been in a while. Average two-year fixes at that level sit around 5.42%, with five-year fixes nudging just below at 5.41%. Locking in for longer can also unlock a bigger loan with some lenders.

Brokers say the activity is regional as much as national. Demand looks strongest in places where £200,000 still buys a real home – Swansea, Cardiff and the South Wales Valleys among them.

Why Five-Year Fixes Are Doing Well

Longer fixes offer two things at once: a stable monthly payment and, often, a slightly higher borrowing ceiling. For first-time buyers nervous about rate moves, that combination has obvious appeal.

What Should Buyers Actually Do?

The honest answer is to recheck the numbers. Anything researched more than six months ago is probably out of date. A fresh affordability assessment from a broker costs nothing and takes under an hour.

It is also worth comparing lenders rather than walking into the nearest branch. Income multiples vary widely between banks, and one rejection from a high street giant does not mean every door is shut.

Do Not Forget the Schemes

Lifetime ISAs still pay a 25% government bonus on savings up to £4,000 a year. For someone two or three years from buying, that adds up quickly. It also pairs neatly with the new low-deposit products.

A Window Worth Stepping Through

2026 looks like the most buyer-friendly year the market has produced in a while. The deposits are smaller. The income multiples are larger. The stress tests are kinder.

None of that helps anyone who assumes the door is still closed. For first-time buyers who have not looked at their borrowing power recently, the gap between what they think they can afford and what lenders will actually offer might be enough to change the conversation entirely.