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First Time Buyer Mortgages

Buying your first home is an exciting milestone, but it can also be daunting.

There are many factors to consider, such as how much you can afford, what type of mortgage you need, and how to find the most competitive deal. 

We have been helping first-time buyers for over 26 years, so you are in safe hands. We are here to help you navigate the process and make your dream home a reality. 

happy young couple with keys to their new house

What is a first-time buyer mortgage?

A first-time buyer is a mortgage you take out to buy your first property. It can be either a repayment mortgage, where you pay back both the interest and the capital over time, or an interest-only mortgage, where you only pay the interest and repay the capital at the end of the term.

The type of mortgage you choose will depend on your personal circumstances and preferences. 

How much can I borrow as a first-time buyer?

The amount you can borrow as a first-time buyer depends on several factors, such as:

  • Your income and outgoings
  • Your credit score and history
  • Your deposit size and source
  • The property value and location
  • The lender’s criteria and affordability assessment

Generally, most lenders will lend you up to 4.5 times your annual income, but some may offer more or less depending on your situation.

To get an idea of how much you can borrow, you can use our mortgage calculator.

We can also help arrange a DIP (Decision in Principle) or also known as AIP (Agreement in Principle). This is a statement from a lender saying that they’ll lend a certain amount to you to purchase a home.

What are the benefits of a Decision in principle / Agreement in principle?

  • You can start looking at properties in your price range. 
  • It can help you to agree on a better price with a seller because it shows you’re a serious buyer who can get a mortgage. 
  • It doesn’t affect your credit rating 

How much deposit do I need as a first-time buyer?

The deposit is the amount of money you put down upfront to buy your property. Having a bigger deposit can lower your loan-to-value (LTV) ratio. The LTV ratio is the percentage of the property value that you borrow from the lender. For example, if you buy a £200,000 property with a £40,000 deposit, your LTV ratio is 80%. 

The deposit size affects your mortgage eligibility, interest rate, and monthly payments. Generally, the higher your deposit, the more likely you are to get approved for a mortgage, the lower your interest rate will be, and the less you will pay each month. 

The minimum deposit you need as a first-time buyer varies depending on the lender and the type of mortgage you want. Some lenders may offer mortgages with as little as 5% deposit. A typical deposit size for a first-time buyer is 10% to 15% of the property value. 

What mortgage is right for me as a first-time buyer?

There are many different types of mortgages available, each with their own features, benefits, and drawbacks.

Some of the most common types of mortgages for first time buyers are:

Fixed rate mortgages

These mortgages have a fixed interest rate for a certain period, usually 2 to 5 years. This means your monthly payments will stay the same during this period, regardless of any changes in the market. Fixed rate mortgages are good for budgeting and stability, but they may have higher interest rates and fees than other types of mortgages.

Variable rate mortgages

These mortgages have an interest rate that can change at any time, depending on the lender’s standard variable rate (SVR) or a base rate set by the Bank of England. This means your monthly payments can go up or down depending on the market conditions. Variable rate mortgages are good for flexibility and potential savings, but they also carry more risk and uncertainty.

Tracker mortgages

These mortgages are a type of variable rate mortgage that track a base rate set by the Bank of England. This means your interest rate will move up or down in line with the base rate, plus or minus a certain margin. Tracker mortgages are good for transparency and simplicity, but they may have higher fees than other types of mortgages.

Discount mortgages

These mortgages are another type of variable rate mortgage that offer a discount on the lender’s SVR for a certain period, usually 2 to 3 years. This means your interest rate will be lower than the SVR during this period, but it can still change at any time. Discount mortgages are good for low initial payments and potential savings, but they may have higher fees than other types of mortgages.

Why choose us?

Our experienced mortgage advisors are here to help you every step of the way. We can help you find the most suitable deal for your situation, guide you through the application process, and answer any questions you may have along the way.

We provide comprehensive advice tailored to your unique circumstances, ensuring you make informed decisions. 

Best of all, we don’t charge any fees for our advice. Fees from other parties may apply. 

Contact us today to book a free consultation. 

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First time buyer FAQs

A first-time buyer is someone who has never owned a property before, either in the UK or abroad. This means that you can't have owned a property as a joint owner, even if you weren't the main owner.

There is no set income requirement for first-time buyers. However, lenders will usually want to see that you can afford the monthly mortgage payments, as well as other costs associated with owning a home, such as council tax, utilities, and repairs.

The amount of deposit you need will depend on the lender and the type of mortgage you choose. However, generally, you'll need a deposit of at least 5% of the purchase price. So, for a £300,000 house, you'd need a deposit of at least £15,000.

If you are a first-time buyer but the person you are buying with isn't, you will still be considered a first-time buyer for the purposes of getting a mortgage. However, the other person will need to meet the lender's income requirements.

In addition to the deposit, there are several other costs associated with buying a home, such as: 

  • Stamp duty 
  • Legal fees 
  • Survey fees 
  • Moving costs 
  • Home Insurance 
  • Protection insurance
  • Start saving early for your deposit. 
  • Get pre-approved for a mortgage before you start looking at properties. 
  • Get a good solicitor to help you with the legal side of things. 
  • Don't be afraid to ask for help from family and friends. 
  • Talk to us early in your journey so we can help you understand the amount you can borrow. 
  • Get a decision in principle this will help to prove you are a serious buyer, when making offers to Estate agents or home builders.