Find the right mortgage for your first home

How do I get a first time buyer mortgage?

Getting your first mortgage can feel overwhelming, but breaking it down into clear steps makes the process much more manageable. Here is what you need to do to go from saving to moving in.

1. Step 1: Check your finances and credit score. Before you start looking at properties, review your credit report with all three major bureaus: Experian, Equifax, and TransUnion. Pay off any outstanding debts, make sure you are on the electoral roll, and close any unused credit accounts. Lenders will scrutinise your spending habits for the past three to six months, so avoid large purchases or gambling transactions during this period.
2. Step 2: Save your deposit. You need a minimum of 5% of the property price, though saving 10% or more will unlock significantly better interest rates. Consider using a Lifetime ISA, which adds a 25% government bonus on savings up to £4,000 per year. On a £250,000 property, a 5% deposit is £12,500 while a 10% deposit is £25,000.
3. Step 3: Get a mortgage agreement in principle. An agreement in principle (also called a decision in principle) shows sellers and estate agents that a lender is willing to offer you a mortgage, subject to full checks. Most lenders can issue one within 24 hours based on a soft credit check. This does not guarantee a mortgage, but it strengthens your position when making offers.
4. Step 4: Find a property and make an offer. Once you know your budget, start viewing properties and make an offer on one you like. Your estate agent will need to see your agreement in principle. If your offer is accepted, you will need to instruct a solicitor or conveyancer to handle the legal work.
5. Step 5: Complete your full mortgage application. Your lender will carry out a full credit check, verify your income and outgoings, and arrange a property valuation. This stage typically takes four to six weeks. Once approved, you will receive a formal mortgage offer, and your solicitor can proceed to exchange contracts and complete the purchase.

What kind of first time buyer mortgage do I need?

The right mortgage for you depends on your financial situation, how much deposit you have saved, and whether you qualify for any government support. Here are the most common situations first time buyers find themselves in.

You have a small deposit

If you have saved 5% of the property price, a 95% mortgage lets you get on the property ladder sooner. Interest rates on 95% mortgages are higher than those available with larger deposits, so you will pay more each month. As your equity grows over the first few years, you can remortgage to a better rate when your initial deal ends.

You have bad credit

A poor credit history does not automatically disqualify you from getting a mortgage. Specialist bad credit mortgages are available from lenders who assess applications individually rather than relying solely on credit scores. You may need a larger deposit of 10% to 15% and should expect higher interest rates, but a mortgage broker who specialises in this area can match you with the right lender.

You need family help

If your parents or family members are willing to support your purchase, a guarantor mortgage allows them to use their savings or property as additional security. This can help you borrow more or secure a better rate without needing a large deposit yourself. The guarantor's assets are only at risk if you fall behind on repayments.

You are buying with someone else

Buying with a partner, friend, or family member through a joint mortgage lets you combine incomes to borrow more. Both applicants are equally responsible for repayments, so it is important to have a legal agreement in place about ownership shares and what happens if one person wants to sell or circumstances change.

You cannot afford to buy outright

Shared ownership lets you buy a share of a property, typically 25% to 75%, and pay rent on the rest. This reduces both the deposit you need and your monthly costs. You can increase your share over time through a process called staircasing, eventually owning the property outright if you choose.

You want to use government support

Several government schemes are designed to help first time buyers get onto the property ladder. The Lifetime ISA offers a 25% bonus on savings up to £4,000 per year, and various local authority programmes may offer additional support such as discounted housing or deposit assistance depending on where you are buying.

What types of first time buyer mortgages are there?

Understanding the different mortgage types helps you choose the right one for your situation. Here is a comparison of the main options available to first time buyers in the UK.

What fees and costs should I expect as a first time buyer?

Beyond your deposit, there are several fees and costs involved in buying your first home. Budgeting for these upfront helps you avoid unexpected surprises and ensures you have enough set aside to complete your purchase.

How much can I borrow as a first time buyer?

The amount you can borrow depends on several factors that lenders use to assess your affordability. Most UK lenders offer between 4 and 4.5 times your annual gross income, though some will lend up to 5.5 times for higher earners or those in certain professions such as medicine, law, or accounting. Here are the key factors that determine your borrowing limit.

• Annual income: Your gross salary is the starting point for every lender's calculation. On a salary of £35,000, you could typically borrow between £140,000 and £157,500.
• Joint income: If you are buying with a partner, most lenders combine both incomes. Two salaries of £30,000 each could support borrowing of £240,000 to £270,000.
• Existing debts: Credit card balances, car finance, student loans, and other regular commitments reduce the amount lenders will offer you, as they are factored into your monthly affordability assessment.
• Deposit size: A larger deposit reduces the loan-to-value ratio, which may allow lenders to offer you more favourable terms and, in some cases, a higher income multiple.
• Monthly outgoings: Lenders stress-test your affordability against potential interest rate rises, typically adding 3% to the current rate to check you could still afford payments if rates increased significantly.
• Credit history: A strong credit record with consistent repayment history reassures lenders and may unlock higher borrowing multiples or better rates.
• Employment type: Employed applicants with a permanent contract are viewed most favourably. Self-employed borrowers typically need two to three years of accounts or tax returns to verify their income.

How can I get a better first time buyer mortgage deal?

Small steps taken before and during your mortgage application can save you thousands of pounds over the life of your loan. Here are five practical ways to strengthen your position and secure a better deal.

1. Tip 1: Build the biggest deposit you can. Every 5% increase in your deposit opens up a new tier of interest rates. Moving from a 5% to a 10% deposit on a £250,000 property could save you over £100 per month in repayments. Use a Lifetime ISA for the 25% government bonus and set up a regular savings plan to build your deposit faster.
2. Tip 2: Fix your credit report before applying. Check your credit file with Experian, Equifax, and TransUnion at least six months before you plan to apply. Correct any errors, make sure you are registered on the electoral roll at your current address, and avoid applying for new credit during this period. Even small improvements to your credit profile can affect the rates you are offered.
3. Tip 3: Compare the total cost, not just the rate. A mortgage with a 4.2% rate and a £999 arrangement fee could cost more overall than one at 4.4% with no fee. Calculate the total amount you will pay over the initial deal period, including all fees and charges, to find the genuinely cheapest option for your circumstances.
4. Tip 4: Get advice from a whole-of-market mortgage broker. A broker who searches the whole market can access deals from dozens of lenders, including exclusive rates not available to customers who apply directly. They can also identify lenders whose criteria best match your circumstances, saving you from rejected applications that could damage your credit score.
5. Tip 5: Time your application carefully. Have your agreement in principle ready before you start viewing properties so you can move quickly when you find the right home. Mortgage offers typically last three to six months, so avoid getting one too early. If you are in a chain, factor in extra time for potential delays and keep your broker informed of any changes.

How does a first time buyer mortgage work?

A mortgage is a loan secured against a property. You borrow money from a lender to buy a home and repay it in monthly instalments over a set term, typically 25 to 35 years. Here is how the key elements fit together.

Your deposit is the percentage of the property price you pay upfront. The rest is covered by your mortgage. If you buy a £250,000 property with a £25,000 deposit, your mortgage is £225,000 at a 90% loan-to-value (LTV) ratio. Lower LTV ratios generally mean lower interest rates because the lender is taking on less risk.

Most first time buyers choose a repayment mortgage, where each monthly payment covers both interest and a portion of the capital. By the end of the term, you own the property outright with no remaining debt. With an interest-only mortgage, you only pay the interest each month and must repay the full loan amount at the end of the term. Interest-only mortgages are rarely available to first time buyers and require a clear repayment strategy.

Your initial interest rate, whether fixed or variable, usually lasts for two to five years. After this deal period ends, your mortgage moves onto the lender's standard variable rate (SVR), which is almost always significantly higher. Most borrowers remortgage to a new deal before the SVR kicks in to keep their payments lower and more predictable.

Your monthly payment depends on the amount borrowed, the interest rate, and the mortgage term. On a £200,000 repayment mortgage at 4.5% over 25 years, your monthly payment would be approximately £1,111. Extending the term to 30 years reduces the monthly payment to around £1,013, but increases the total interest you pay over the life of the mortgage by several thousand pounds.

If you fall behind on mortgage payments, your lender will contact you to discuss options such as payment holidays, temporary interest-only arrangements, or term extensions. As a last resort, the lender can repossess the property and sell it to recover the debt. This is why lenders carry out thorough affordability checks before approving your application, and why it is important to leave yourself a financial buffer for unexpected costs.