Improving First-Time Buyer Outcomes Through Intergenerational Planning: A Case Study for Advisers

As competition intensifies in the first-time buyer market, many advisers are navigating the growing availability of 95% and 98% loan-to-value (LTV) mortgages. While these products provide faster access to the property ladder, they do not always represent the strongest long-term solution for clients.

This case highlights how broadening the advice conversation to include later life lending can materially improve outcomes for both generations.

The Client Scenario

A mortgage adviser was supporting Tom and Rachel, first-time buyers purchasing a property for £325,000. They had saved £16,250 – a 5% deposit -and qualified for a 95% LTV mortgage.

Affordability passed lender criteria. However, the adviser recognised that borrowing at 95% LTV would mean higher interest rates, limited product choice and increased monthly repayments compared with lower LTV bands. Over time, those higher repayments would reduce the couple’s ability to contribute to pensions and build wider financial resilience.

Moneyfacts data shows that buyers with a 5% deposit have access to significantly fewer products than those with a 20% deposit, and typically at higher rates.* The adviser therefore considered whether securing the property at the highest available LTV genuinely delivered the best client outcome.

Introducing the Intergenerational Conversation

During factfinding, it emerged that Tom’s parents were mortgage-free and had previously indicated they would like to help if possible. They were, however, understandably cautious about gifting large sums outright or disrupting their retirement planning.

Rather than viewing this as a simple gift discussion, the adviser explored whether housing wealth could be used more strategically. With the clients’ agreement, a referral was made to Key Partnerships to assess whether later life lending could provide a suitable, structured solution.

The Later Life Lending Approach

Tom’s parents, aged 68 and 70, owned a property valued at approximately £700,000 with no outstanding mortgage. After receiving specialist regulated advice, they chose to release £50,000 through a modern lifetime mortgage.

The product selected included voluntary repayment options and flexible early repayment terms, allowing them to retain control and maintain flexibility within their broader retirement plan. Crucially, the funds were used to supplement, not replace, Tom and Rachel’s existing savings.

The Outcome

By increasing their deposit from 5% to just over 20%, Tom and Rachel reduced their borrowing to 80% LTV. This materially changed their mortgage position.

They gained access to a substantially wider range of products and secured a lower interest rate, reducing their monthly repayments and improving long-term affordability. The lower LTV also strengthened their financial resilience and preserved their ability to continue contributing to pensions and savings.

For Tom’s parents, the solution allowed them to see the benefit of their support during their lifetime, while maintaining flexibility and safeguarding their own retirement objectives.

The Adviser Implication

This case reflects a broader trend in the current market. While high-LTV mortgages are attracting attention, deposit size remains one of the most powerful levers influencing product availability, pricing and long-term sustainability.

Equity Release Council data shows the average amount released through equity release in 2025 was £123,174**, demonstrating the potential scale of housing wealth as a planning tool. Santander has also reported that its average first-time buyer deposit last year was £85,000***, highlighting the increasing reliance on family support.

For advisers, the opportunity lies not in replacing mainstream mortgage advice, but in expanding the conversation where appropriate. Considering later life lending as part of intergenerational planning can help deliver improved client outcomes, strengthen Consumer Duty alignment and create additional revenue opportunities through referral partnerships.

By working with a specialist referral partner such as Key Partnerships, advisers can ensure later life lending discussions are handled compliantly and professionally, while remaining focused on delivering suitable and sustainable solutions for both generations.

As the first-time buyer mortgage market continues to evolve, those advisers who look beyond headline LTV rates and focus on deposit strategy may be best placed to deliver meaningful long-term value to their clients.

* Source: Moneyfacts mortgage product data snapshot, February 2026.
** Equity Release Council, Q4 2025 lending figures.
*** Santander UK press release, 98% LTV mortgage launch.