Low-deposit mortgage rates hit a 3-year low: Finally, some good news for first-time buyers.

After what feels like a lifetime of rate hikes and grim mortgage headlines, we’ve finally got something worth smiling about.

According to fresh data from Moneyfacts, mortgage rates for borrowers with small deposits are now the lowest they’ve been since September 2022 - before the mini-Budget chaos sent rates through the roof.

Yes, really!

The numbers (without the jargon)

If you’ve got a 5% deposit, average two-year fixed rates now sit around 5.41%, compared to 6.55% this time last year.
If you’ve saved 10%, you’re looking at around 5.24%, down from 6.25% in late 2023.

Both are the lowest they’ve been in over three years, and lenders have also boosted the number of deals on offer. In fact, there are now 465 mortgage products available at 95% loan-to-value (LTV) - the highest number since 2008.

So not only are rates falling, but there’s more choice for people with smaller deposits too.

That’s a win.

“If you’ve got a 5% deposit, average two-year fixed rates now sit around 5.41%, compared to 6.55% this time last year.
If you’ve saved 10%, you’re looking at around 5.24%, down from 6.25% in late 2023.”

Why this matters (especially if you’re a first-time buyer)

Let’s be honest: saving for a deposit has always been tough. Add higher interest rates, rising house prices and general cost-of-living chaos, and the last couple of years have felt like a bit of a stitch-up for first-time buyers.

But this drop in low-deposit rates could be a genuine turning point. For anyone trying to buy with a 5–10% deposit, every little drop in rates makes a big difference to affordability, and could be the difference between “we’ll wait another year” and “we can actually do this.”

It’s not just about cheaper payments either. Lenders loosening up means more options on the table - and that’s massive for buyers who were struggling to get a look-in.

If your current fixed rate is ending soon… listen up

This isn’t just good news for new buyers either; If you’re coming to the end of a fixed rate in the next six months, now’s the time to take a look.

Most lenders will actually let you lock in a new rate up to six months early, and if rates drop again before your current deal ends, you can usually switch to the cheaper rate before completion.

If, on the other hand, rates go back up again, you’ll be glad you locked in when you did. Basically: there’s no downside to getting ahead.

And with the average two-year fixed rate now sitting at 4.94% (down from 6.29% last November), the savings can be huge.
Moneyfacts calculated that’s about £203 less per month on a £250,000 mortgage over 25 years.

That’s £2,436 a year back in your pocket.

Our take

After the disaster that was the 2022 mini-Budget, this is exactly the kind of recovery we’ve been waiting for.

We’re not popping the champagne just yet (there’s still a long way to go), but for first-time buyers and anyone remortgaging soon, this is genuinely good news.

Rates are better. Choice is improving. Confidence is creeping back.

If you’re looking to buy with a smaller deposit - or if your deal’s ending within the next six months - now’s the time to start exploring your options.

Because mortgage rates don’t wait around.

Source: Moneyfacts UK Mortgage Trends Treasury Report - “Lenders drive down the cost of low deposit mortgages.” (11 Nov 2025)