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Buying your first home is exciting but there’s a lot you’ll need to know about first time buyer mortgages. We look at what deposit you’ll need, how much you can borrow, your first time buyer mortgage options, how to apply and how to boost your chances of your application being accepted.
KEY INFORMATION
Start by getting an idea of how much you can borrow with the calculator below. If you’re buying alone just leave the partner’s salary blank.
This gives you a starting point. The calculation above assumes you can borrow 5x your salary. To get a more accurate picture speak to a fee-free mortgage broker about your salary, outgoings and credit rating to find out how big a mortgage you can borrow and to check whether the monthly repayments are affordable.
Your next step is to get a Mortgage in Principle (sometimes called an agreement or decision in principle). This is a statement from a lender on how much they would lend you ‘in principle’ based on information you have provided about your income and outgoings.
You can get a Mortgage in Principle in a matter of minutes from fee-free mortgage brokers L&C. The online form lets you check your eligibility against a wide range of lenders’ criteria to see which deals you may qualify for, how much you can borrow and what it will cost. You can then click ‘submit’ to receive an online Decision in Principle certificate, which will typically last up to 90 days.
It’s advisable to get a mortgage in principle as early in the home buying process as possible, ideally before you start house-hunting. You want to be seen as a serious buyer, ready to proceed, before you make your first offer. Arrange a Mortgage Agreement in Principle today with the fee-free service provided by L&C mortgage brokers
Once you have found a property and had an offer accepted, you can start the formal mortgage application process. Your mortgage broker can take this forward for you. The lender will carry out a full credit check, undertake a mortgage valuation of the property and once happy with your application will issue a formal mortgage offer.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
Mortgage lenders usually require at least 5% of the value of the property as a deposit. 5% deposit mortgages usually come with higher mortgage rates than you would get if you had saved a bigger deposit. The bigger your deposit, the wider the choice of lenders and potentially lower (i.e. cheaper) mortgage rates you’ll be able to access.
In fact, the average deposit first time buyers paid in 2024 was £61,090 with deposits averaging 20% of the purchase price, according to Halifax.
This table shows how much you’d need to save for a deposit on a £300,000 home.
| Cost of property | Deposit percentage | Deposit amount in £ |
|---|---|---|
| £300,000 | 5% | £15,000 |
| £300,000 | 10% | £30,000 |
| £300,000 | 15% | £45,000 |
| £300,000 | 20% | £60,000 |
It’s possible to get a first time buyer mortgage with no deposit. Here are two ways to do this:
You can take out a 100% mortgage with Skipton’s Track Record mortgage which is designed for those with a ‘track record’ of paying rent. Find more information including on eligibility in our guide 100% mortgages: Should I get one?
With guarantor mortgages, you can buy a house with no deposit, if you have a loved one who is prepared to put up savings or a property as security against the loan. Family Springboard mortgages work in a similar way. We explain all your options and what to consider in our guide on how to get a mortgage with no deposit.
There are risks with all mortgages – your home or property may be repossessed if you don’t keep up repayments on your mortgage. But if you take out a mortgage with a small or no deposit, there is a greater risk of negative equity than if you get a mortgage with a larger deposit. Negative equity is when the value of your home is lower than your outstanding mortgage balance.
Here’s what a lender will assess when deciding how much they’ll let you borrow on a mortgage
| Factor | How it affects how much you can borrow |
|---|---|
| Salary | Lenders will typically lend up to 4.5 x your salary. But some lend bigger multiples to first time buyers. Find out more in our guide to the Best mortgage lenders. Bonuses and income from second jobs may be considered in this. |
| Outgoings | Lenders will go through your outgoings and monthly financial commitments, such as childcare costs and outstanding loans, when determining how much they may lend you. |
| Credit history | Lenders will check your credit history. If you have bad credit, it may be harder to get a mortgage or borrow as much. Read our guide 11 Tips to improve your credit score for a mortgage. |
For example, say you and your partner have a combined income of £60,000 and a lender says it will lend you 4.5 times this amount, this means you can borrow a maximum of £270,000.
If you have saved £30,000 for your deposit, this means you can buy a £300,000 house with a 10% deposit and take out a £270,000 mortgage for the remaining 90%.
| Source of £ | Amount |
|---|---|
| Deposit | £30,000 |
| Mortgage | £270,000 |
| Total | £300,000 |
However, this example doesn’t take into account the other costs of buying a house such as solicitor fees when buying a house and survey costs . Read more in our guide on the Costs of buying a house.
If you’re a first time buyer, mortgage calculators are a good place to start to see how much you can afford to borrow. The following affordability calculator shows you instantly how much you may be able to borrow and afford based on your income. While the following mortgage cost calculator will also give you an idea of what your monthly mortgage costs are likely to be.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
David Hollingworth at L&C Mortgages says, “First time buyers generally face two big challenges in getting on the property ladder. Firstly, saving for a deposit can be difficult especially when faced with high rent payments. Secondly, being able to meet mortgage criteria to borrow enough to bridge the gap between high house prices and the deposit can seem stretching.”
He adds, “There are support schemes to help such as the Lifetime ISA boost to savings and stamp duty relief. The mortgage market is very competitive so there are products that can help those with a small or even no deposit. However the myriad of mortgage products on offer can be confusing, so first time buyers will benefit from mortgage advice to help navigate their way through the maze.”
Mortgage rates vary between lenders so as a first time buyer, you could save a considerable amount of money in the long term by shopping around for the best deal.
Here are the best mortgage rates on offer in March 2025 if you have a 10% deposit and are looking for a 2 year fixed rate mortgage. Mortgage rates tend to differ depending on your loan to value (LTV). Calculate your loan to value ratio instantly with our simple mortgage loan to value calculator.
For a full range of the best mortgage rates at all deposit levels from 0% to 40%, for 2 year and 5 year fixed rate mortgages and the best rates on variable rate mortgages, read our guide on the Best first time buyer mortgage rates, which is updated regularly.
Here are the lowest mortgage rates this month if you’ve got a 10% deposit. The monthly mortgage cost examples are based on a 30 year term.
| Lender | Initial rate | Fee | Monthly cost on £100,000 mortgage | Monthly cost on £200,000 mortgage |
|---|---|---|---|---|
| Virgin Money | 4.72% | £995 | £520 | £1,040 |
| Barclays | 4.74% | £899 | £521 | £1,042 |
| Halifax | 4.78% | £1,099 | £523 | £1,046 |
However, different lenders have different lending criteria so the easiest and quickest way to find the best first time buyer mortgage rate for you is to speak to a fee-free mortgage broker. They’ll scour the market for you to find you the best deal and they’ll use their expert knowledge to guide you through the process too.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
The best mortgage lender for you as a first time buyer will depend on your circumstances. But some lenders offer special products designed for first time buyers. For example:
Find out more in our guide to the best mortgage lenders.
Lifetime ISAs are for your first home or your retirement. Anyone aged 18-39 can open a LISA. You can save up to £4,000 each tax year into it and the government will give you a 25% bonus on your contributions, up to a max of £1,000 per year. However, there are restrictions on how you can use the money so be clear on that before saving into one. Find out more in our Best Lifetime ISA guide.
The Mortgage Guarantee scheme isn’t a scheme you specifically apply for, it was designed to encourage lenders to offer 95% mortgages. However, many lenders offering 95% mortgages don’t use this scheme. It’s open to home movers as well as first time buyers. This scheme ends in June 2025 and will be replaced by the Freedom to Buy Mortgage scheme which is expected to work in a similar way.
You buy a share of a property (usually 25%-75%) and pay rent on the rest, so you’ll need a smaller mortgage and smaller deposit than if you buy on the open market. But there are pros and cons to this complicated scheme. Read more in Shared Ownership: What is it? Is it worth it?
The First Homes scheme offers newly built homes to local first time buyers with a discount of at least 30% which stays on the First Home forever.
However there’s criteria you’ll need to meet to be eligible:
You’ll need to decide what type of first time buyer mortgage to take out:
| Mortgage type | What it means |
|---|---|
| Fixed rate mortgage | You’ll pay a fixed rate during your initial term, usually 2-5 years. So you won’t pay more on your monthly mortgage payments if interest rates increase, but you won’t pay less if they fall either. |
| Tracker mortgages | The rate you’ll pay will go up and down in line with the base rate. This means if the Bank of England cuts interest rates, your mortgage payments will go down. But if it hikes interest rates, your mortgage payments will go up. |
| Discounted mortgages | Discounted mortgages track under the lender’s standard variable rate. So your rate may go up or down, but this depend on any changes the lender decides to make to its standard variable rate. |
| Offset mortgages | With an offset mortgage, you use a linked savings account to offset the amount you owe on your mortgage – this means instead of earning interest on your savings, you pay less interest on your mortgage. If you’re a first time buyer and you have a large chunk of savings you might be better off using these for your deposit. But your fee-free mortgage broker will talk you though it to help you make the best decision for you. |
| Guarantor mortgages | These allow you to get a mortgage even if you have no deposit. A mortgage guarantor is someone – usually a parent, a relative or even a close friend – who takes on some of the risk of the mortgage by acting as a guarantor. This usually involves them offering their savings or their home as security against the loan and committing to making the mortgage payments if the borrower defaults. |
| 100% mortgages | Skipton Building Society’s 100% Track Record mortgage is a 5 year fixed rate mortgage available to those with a track record of renting. For more details on how it works see our guide on 100% mortgages. |
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
Yes it is possible but getting a Buy to Let mortgage as a first time buyer can be more difficult than getting a standard mortgage. Buy to Let mortgages require a bigger deposit and are more expensive than residential mortgages. You can get an idea of how much you could borrow with our buy to let mortgage calculator.
For decades, most homeowners in the UK have had a 25-year term on their mortgage. However, longer-term mortgages of 30 years or more are becoming increasingly popular. Research from Uswitch found 51% of mortgage borrowers chose a term of 30 years or longer in 2023.
Taking out a 30 year mortgage term or longer so you can stretch repayments over a longer period will lower the monthly cost of your mortgage. By doing so, your mortgage will cost more in total as you will pay more in interest over the period of your mortgage. Read more in our guide on 30 year mortgages.
Documents you’ll need to provide in the mortgage application process may include:
You might also need to show your outgoings, including how much you’re borrowing on credit cards and other loans and general living costs such as travel, childcare and entertainment.
According to Nationwide’s affordability report, a prospective buyer earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 36% of their take-home pay – well above the long-run average of 30%.
The property cost and any fees on first time buyer mortgages are not the only costs of buying a house. There are quite a few extras to be aware of when you are budgeting how much you can afford.
Cover for conveyancing, mortgage and survey costs, should your property purchase fall through.
If your child wants to buy their first home, there are a number of ways you can help them do it.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
If you’re a first time buyer, you’re exempt from paying any stamp duty in England and Northern Ireland providing the property costs less than £425,000. However, due to stamp duty changes, this threshold is being lowered to £300,000 from 1 April 2025.
Many first time buyers choose fixed rate mortgages because they offer security in terms of how much mortgage payments will be each month. Other first time buyers opt for tracker or discounted mortgages, in the hope they’ll be cheaper over time. But it’s a good idea to get mortgage advice for first time buyers from a broker so you fully understand your options. For more information read our guide Understanding mortgage types and which one you need.
Getting mortgage advice for first time buyers at the start of the process is advisable because you’ll know from the outset what your likely budget will be. It needn’t be onerous – you can often start the process online. But we do recommend talking through your plans and finances with a broker or lender to ensure you fully understand what is involved and your options. For more information, read our guide Do I need a mortgage broker?
You’ll usually need at least a 5% deposit, there are 5% deposit mortgages unless you’re taking out a 100% mortgage or a guarantor mortgage.
If you’re looking for mortgage advice for first time buyers, it’s a good idea to speak to a mortgage broker. They’ll explain your options from a wide range of lenders and may have access to deals not available to you if you go straight to the lender.
While you can apply for a mortgage in principle before you start house hunting, you can only apply for mortgage once you’ve had an offer accepted on a property. Read more in our guide When to apply for a mortgage.
The term LTV stands for loan-to-value, and tells you what percentage of the home’s value is borrowed. For example, if you buy a £100,000 house and you pay £20,000 as the deposit, your LTV is 80% because you’ve already paid 20% when you put down the deposit and borrowed the remaining 80. If you were to pay £5,000 deposit, your LTV would be 95%.
Generally speaking, higher LTVs lead to higher interest rates, because they are seen as riskier for lenders.
Yes. As long as you can get a mortgage that’s affordable and you’re able to buy a house you can afford, it may be a good time to get a first time buyer mortgage. In fact, 341,068 first time buyers got on the property ladder in 2024, according to Halifax.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
Mortgage service provided by London & Country Mortgages (L&C), Unit 26 (2.06), Newark Works, 2 Foundry Lane, Bath BA2 3GZ, authorised and regulated by the Financial Conduct Authority (FRN: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of Seopa Ltd, for home insurance, authorised and regulated by the Financial Conduct Authority (FCA FRN: 313860).
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Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
