First Time Buyer

The minimum deposit for a first time buyer mortgage is 5% of the property price. On a £235,000 home, that works out at £11,750. While 5% deposit mortgages exist, putting down a larger deposit gives you access to lower interest rates and reduces your monthly payments.

Here is how your deposit size affects the deals available to you:

• 5% deposit (95% LTV): The minimum accepted by most lenders. Rates are higher because the lender carries more risk.
• 10% deposit (90% LTV): A significant step down in rates. This is the most common deposit level for first time buyers.
• 15-20% deposit (80-85% LTV): Unlocks competitive rates and a wider choice of lenders.

If saving feels like a stretch, a first time buyer deposit guide explains strategies such as Lifetime ISAs (where the government adds 25% on top of your savings, up to £1,000 per year) and family-assisted deposit schemes.

Most lenders calculate your maximum borrowing at 4 to 4.5 times your annual income. Some specialist lenders stretch to 5 or even 6 times income for higher earners or certain professions such as doctors, solicitors, and accountants.

For example, if you earn £35,000 a year, a standard lender would offer between £140,000 and £157,500. A joint application with a combined income of £60,000 could unlock borrowing of £240,000 to £270,000.

However, the amount you are approved for depends on more than salary alone. Lenders run an affordability assessment that factors in:

• Existing debts: Credit cards, car finance, student loan repayments
• Living costs: Childcare, commuting, regular commitments
• Stress testing: Whether you could still afford payments if interest rates rose by 3%

Use our mortgage affordability calculator to get a personalised estimate before you start viewing properties. If your income alone is not enough, explore 95% mortgage options that let you buy with a smaller deposit.

Choosing the right mortgage type is one of the biggest decisions you will make as a first time buyer. Each option works differently, and the best choice depends on your budget, risk appetite, and how long you plan to stay in the property.

Fixed rate mortgages lock your interest rate for a set period, typically 2 or 5 years. Your monthly payments stay the same regardless of what happens to the Bank of England base rate. Around 95% of first time buyers choose a fixed rate because of the payment certainty it provides.

Variable rate mortgages move up or down with the lender's standard variable rate (SVR) or a tracker rate linked to the base rate. Monthly payments can change, which makes budgeting harder but may cost less in the short term if rates fall.

Offset mortgages link your savings account to your mortgage. The savings balance is deducted from your outstanding mortgage before interest is calculated. If you owe £200,000 and have £20,000 in savings, you only pay interest on £180,000.

For a detailed comparison of today's deals, see our guide to best mortgage rates. A 2 year fixed mortgage suits buyers who want flexibility to remortgage sooner, while a 5 year fixed mortgage provides longer payment certainty.

Several government-backed schemes exist specifically to help first time buyers get onto the property ladder. The right scheme depends on your income, savings, and where you want to buy.

Shared ownership lets you buy a share of a property (between 25% and 75%) and pay rent on the rest. You only need a deposit on the share you are buying, which makes the upfront cost far lower. For example, buying a 40% share of a £250,000 home means you need a deposit on £100,000 rather than the full price.

Lifetime ISA gives you a 25% government bonus on savings up to £4,000 per year, meaning up to £1,000 free each year towards your deposit. You must be between 18 and 39 to open one, and the property must cost £450,000 or less.

Mortgage guarantee scheme encourages lenders to offer 95% LTV mortgages by providing a government-backed guarantee on the portion above 80% LTV. This runs until June 2025 but may be extended.

First Homes scheme offers new-build properties at a discount of 30-50% to local first time buyers. Eligibility varies by local authority, and discounts are passed on when you sell.

Read our full breakdown of Help to Buy alternatives and current schemes to understand which options you qualify for.

First time buyers in England and Northern Ireland benefit from stamp duty relief that significantly reduces the tax bill on your first property purchase. The current thresholds (as of April 2025) work as follows:

• Up to £300,000: No stamp duty to pay at all
• £300,001 to £500,000: You pay 5% on the portion above £300,000
• Above £500,000: Standard rates apply with no first time buyer relief

For example, if you buy a property for £350,000, you pay stamp duty only on the £50,000 above the threshold: £50,000 x 5% = £2,500. A buyer purchasing at the average first time buyer price of £235,000 pays no stamp duty at all.

Scotland and Wales operate different systems. Scotland uses Land and Buildings Transaction Tax (LBTT) with different thresholds, and Wales uses Land Transaction Tax (LTT). Neither currently offers specific first time buyer relief at the same level.

Check the latest thresholds in our detailed best first time buyer lenders comparison, which includes full cost breakdowns.

Your deposit and stamp duty are only part of the picture. First time buyers should budget for several additional costs that catch many people off guard. Knowing about them early means you can plan your savings properly.

Solicitor/conveyancer fees: Expect to pay between £1,000 and £2,000 including VAT and disbursements. Your solicitor handles searches, land registry, and the legal transfer of ownership.

Survey costs: A homebuyer's report typically costs £400-£700, while a full structural survey on an older property can reach £600-£1,500. Skipping the survey to save money is a false economy if the property has hidden defects.

Mortgage arrangement fees: Many competitive mortgage deals carry a product fee of £500-£2,000. You can usually add this to the mortgage balance, but you will pay interest on it for the life of the loan.

Removal costs: Professional removals for a one-bedroom flat start at around £300, rising to £600-£1,200 for a three-bedroom house.

Buildings insurance: Required from the date of exchange (not completion). Typical costs range from £150 to £400 per year depending on the property.

As a rough guide, budget an additional £3,000-£6,000 on top of your deposit for buying costs. Use our first time buyer calculator to estimate your total upfront costs.