First-time buyers (FTBs) are "significantly" better off buying than renting over a five-year term, with an average saving of £64,000 over this period, Tembo has revealed.

The mortgage and savings platform’s inaugural Tembo First-Time Buyer Index found that FTBs are on average £7,600 better off after one year compared to those who continue renting and invest their deposit elsewhere.

Despite stagnant incomes, falling mortgage rates have improved affordability in the short term. The average FTB mortgage rate has dropped to 4.48%, which is the lowest level in over two years, which has reduced monthly repayments and brings housing costs below 30% of income for the third consecutive quarter.

Despite this, Tembo stated that upfront costs remain a major obstacle. Saving for a typical deposit, which now averages at £43,324, which takes over a decade to save for many buyers, assuming modest savings rates.

At the same time, most buyers are entering the market with existing debt, with 80% carrying an average balance of £9,277 in loans prior to purchase.

The Tembo First-Time Buyer Index will be published quarterly, providing a snapshot of how accessible the housing market is for new buyers.

Each edition will include an overall "attractiveness score", designed to track whether conditions are improving or worsening for FTBs over time. The score for Q1 2026 is 637, landing in the very high band, which suggest broad accessibility.

Chief executive officer at Tembo, Richard Dana, stated: "FTBs are facing one of the toughest markets in decades, with higher deposits, rising living costs and stretched borrowing requirements. But what this data shows clearly is that, over time, buying still significantly outperforms renting for most people.

"Trying to time the market perfectly is incredibly difficult. What matters more is getting on the ladder when you can and staying there. With this new index, we want to give would-be first time buyers clearer, data-driven insights to help them understand their options and make more confident decisions."

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