Buying your first home is one of the biggest financial decisions you’ll ever make. As a first-time buyer, understanding how mortgages work, what deposit you’ll need, and which deals are available can feel overwhelming. This complete first-time buyer mortgage guide will walk you through the process step by step, so you can get on the property ladder with confidence.
What is a First-Time Buyer Mortgage?
A first-time buyer mortgage is a home loan designed for people who are purchasing their first property. Many lenders offer exclusive deals for first-time buyers, such as lower deposit requirements, cashback incentives, or help with fees.
👉 Simply put: if you’ve never owned a property before, you are usually eligible for a first-time buyer mortgage.
How Much Deposit Do You Need?
One of the first questions new buyers ask is: “How much deposit do I need for a mortgage?”
- Minimum deposit: Typically 5% of the property value.
- Better rates with larger deposits: If you can save 10%, 15%, or 20%, you’ll usually access much cheaper mortgage deals.
- Example: On a £200,000 property:
- 5% deposit = £10,000
- 10% deposit = £20,000
- 20% deposit = £40,000
👉 The larger your deposit, the smaller your monthly repayments and the lower your risk to lenders.
Types of Mortgages for First-Time Buyers
There are several mortgage types to choose from. Here are the most common:
1. Fixed-Rate Mortgage
- Your interest rate stays the same for 2, 3, 5, or even 10 years.
- Great for budgeting and peace of mind.
- You won’t benefit if interest rates fall.
2. Tracker Mortgage
- Your rate “tracks” the Bank of England base rate plus a set percentage.
- Repayments can go up or down.
- Riskier, but could save you money if rates stay low.
3. Variable-Rate Mortgage
- Your lender sets the interest rate and can change it anytime.
- Often more expensive, but flexible.
4. Government-Backed Mortgages
- Some schemes, like shared ownership or Help to Buy, make it easier for first-time buyers to purchase a property with a smaller deposit.
Step-by-Step Guide: How to Get a Mortgage as a First-Time Buyer
- Check your credit score
Lenders use your credit history to decide whether to approve your mortgage and what rate to offer. A higher score means better deals. - Set your budget
Work out how much you can realistically borrow and afford each month. Online mortgage calculators are useful starting points. - Save for a deposit
Aim for at least 10% if possible, as this opens the door to cheaper rates. - Get an Agreement in Principle (AIP)
An AIP shows how much a lender is willing to let you borrow. Estate agents often ask for this before accepting your offer. - Find the right mortgage
Compare deals across multiple lenders or use a mortgage broker to find the best option for your circumstances. - Make your offer
Once your mortgage in principle is in place, you can confidently make an offer on a property. - Complete legal and survey checks
Solicitors and surveyors will ensure everything is in order before contracts are exchanged. - Final approval and move-in
After all checks are completed, your mortgage funds are released, and you can collect the keys!
Government Schemes to Help First-Time Buyers (UK)
If saving for a deposit feels impossible, government schemes can help:
- Help to Buy: Shared Ownership – Buy a share of a property and pay rent on the rest.
- First Homes Scheme – Homes sold at a discount to first-time buyers and key workers.
- Lifetime ISA (LISA) – Save up to £4,000 a year towards your deposit and receive a 25% government bonus.
Costs to Consider Beyond the Deposit
Many first-time buyers forget that a mortgage isn’t the only cost involved. Here are some additional expenses to budget for:
- Stamp Duty (if applicable) – First-time buyers often get discounts, but some purchases may still incur a fee.
- Solicitor fees – Usually £500–£1,500.
- Survey fees – Around £300–£600 depending on the survey.
- Valuation fees – Required by the lender.
- Moving costs – Removals, furniture, etc.
Tips to Improve Your Chances of Mortgage Approval
- Pay off outstanding debts before applying.
- Register on the electoral roll at your current address.
- Avoid big credit applications before applying (car loans, credit cards, etc.).
- Show stable employment and consistent income.
Fixed-Rate vs Tracker Mortgages for First-Time Buyers
Still unsure which mortgage is right for you?
| Mortgage Type | Pros | Cons | Best For |
|---|---|---|---|
| Fixed-Rate | Predictable payments, protection from rising rates | Won’t benefit if rates fall | First-time buyers who want stability |
| Tracker | Could pay less if base rate stays low | Risk of higher repayments | Buyers comfortable with risk |
FAQs: First-Time Buyer Mortgages
1. Can I get a mortgage with bad credit as a first-time buyer?
Yes, but it may be more expensive and require a larger deposit. Specialist lenders may help.
2. How long does the mortgage process take?
On average, 6–12 weeks from application to completion.
3. What credit score do I need for a mortgage?
There’s no universal minimum, but a higher score gives you access to better rates. Most lenders want to see evidence of reliable repayments.
Key Takeaway
Getting a first-time buyer mortgage can seem daunting, but with the right preparation—saving for a deposit, improving your credit score, and comparing deals—you can take your first step onto the property ladder with confidence.
Remember: the best mortgage is the one that fits your financial situation, not just the lowest headline rate. Always seek advice from a qualified mortgage advisor before committing.