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First-time buyer mortgages

Compare first-time buyer mortgages

Our broker partner Mojo can help you get a mortgage for your first home

We've partnered with Mojo Mortgages to help you compare first-time buyer mortgage deals with an expert

  • Advisers who can look at mortgage rates from across the market

  • Get an expert-recommended deal

  • They can help you apply when you're ready

Getting a mortgage as a first-time buyer

If you're buying your first home, you normally need a mortgage to fund the purchase for you.

While some lenders have specialist products for first-time buyers, most of the deals that are available to you, are also available to current homeowners.

Your first home is likely to be the most expensive thing you've ever bought (and your first mortgage is likely to be the biggest loan you've ever taken out). So, it may be worth getting help from an expert broker to make sure you get a deal suited to you and your circumstances.

What is considered a first-time buyer?

A first-time buyer is someone who:

  • Has never bought a home before, either in the UK or abroad
  • Has never inherited a home, either in the UK or abroad

While most mortgages aren't specific to first-time buyers, many home ownership schemes (to help you get on the property ladder) are dependent on you being classed as a first-time buyer.

What mortgage is best for first-time buyers?

The best mortgage for first-time buyers vary depending on individual circumstances.

The deals available to you depend on a variety of factors, including:

  • Whether you want a fixed or variable rate
  • The size of deposit you have
  • What type of home you want to buy

Speaking to an independent mortgage broker can be the best way to find a deal that's suited to you. They can compare mortgages from across the market and tailor the recommendations to ones you're most likely to be accepted for.

Types of mortgages for first-time buyers

When applying for a mortgage as a first-time buyer, a key decision you need to make is whether to choose a fixed rate or variable rate deal.

A fixed rate mortgage locks in the interest rate for a set amount time – the most common deals last for 2 or 5 years. But you can get fixed rate mortgages for 1, 3, 7 or 10 years, or even longer.

Your rate remains the same for the duration of the deal so you don't need to worry about your monthly payments increasing for this time. But if interest rates fall, you also won't benefit from a decrease in payments.



With a variable rate mortgage, the rate is subject to change during your deal period. If rates fall, you could benefit from lower payments during your deal. But if you opt for a variable rate mortgage, you have to make sure you can afford higher monthly repayments if rates rise.

Lenders can sometimes put floors or caps on a variable rate deal. A floor means your rate never falls below a certain level, while a cap (which tends to be more unusual) means it won't rise above a certain amount.

The main types of variable rate mortgages are:

  • Standard variable rate (SVR) mortgages
  • Discount mortgages
  • Tracker mortgages

You're normally moved on to your lender's SVR once your current fixed or variable deal comes to an end. The SVR is normally higher than other deals available on the market, so many people remortgage to another rate if possible. One of the upsides of being on an SVR is that it’s flexible. You normally won’t be charged early repayment fees if you want to pay off a chunk of your mortgage. Although this can also be the case with certain tracker deals.

discount mortgage has a rate at a set amount below the SVR. For example, if the SVR is 5%, then you could get a discount rate mortgage for 2%. The rate rises and falls with the SVR.

tracker mortgage rate is normally set at a certain amount above the Bank of England’s base rate. For example, if the Bank of England base rate was 4.5%, your interest rate may be 6.5%. Your rate then changes along with the Bank of England’s base rate.

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

Lenders look at different criteria when deciding how much you can borrow from them for a mortgage. The main ones are:

  • Income
  • Deposit
  • Spending habits
  • Credit history

Lenders normally let you borrow around 4.5 times your annual income for a mortgage. But this can vary depending on your personal circumstances.

Your deposit amount is key to your borrowing amount. It normally needs to be at least 5% of the property value or price (whichever is lower).

Banks and building societies want to be confident you can repay the loan so they also look at your spending habits to check you can afford the monthly repayments. You may want to do a review of your finances in advance of applying, and reduce outgoings where possible.

Lenders want to see evidence that you can manage debt which is why they look at your credit history. It's worth taking steps to improve your credit rating before applying for a mortgage (if you need to). One way to do this is to take out a credit card and use it to make small payments – but make sure to always repay it on time.

What is a first-time buyer deposit?

The first step in buying a property is getting your deposit together. A deposit is an amount of money you’ve saved up to put towards buying your first home.

To get a mortgage for your first home, you usually need a deposit of at least 5% of the property value or price (whichever is lower).

But the bigger deposit you can save, normally the lower mortgage rates you get access to, because lenders see you as less of a risk. This and the fact you're borrowing less means you benefit from lower monthly repayments.

Putting more money down when you purchase your first home also means you have a greater equity share in the property. This means you have less chance of going into negative equity (when your home is worth less than what you owe your mortgage provider for it).

The table below shows how much money you need to save to make up different deposit percentages for a £200,000 property.

Deposit percentage Deposit amount

What is a loan to value ratio (LTV)?

Loan-to-value (LTV) is the amount of the property value (or price, whichever is lower) a lender is prepared to offer you.

For example, if the property you want to buy is worth £200,000 and you have a £40,000 deposit, this amounts to 20% of the property value. You'd then need to borrow the remaining 80% (£160,000) which means you'd need an 80% LTV mortgage.

Lower LTV mortgages tend to offer better rates than higher LTV deals. The lowest rates are usually available for 60% mortgages (which require a 40% deposit).

A breakdown of how loan to value is calculated

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What schemes are available to help first-time buyers?

There are a number of schemes available to help you buy your first home, including:

  • Shared Ownership
  • First Homes
  • Mortgage Guarantee scheme
  • Right to Buy
  • Help to Buy - Wales
  • Lifetime ISA

Shared Ownership allows you to buy a share of your home – between 10% and 75%. You pay rent on the remaining share. You take out a mortgage on the share you want to buy and pay rent on the remaining amount. This means you need to make sure you can afford both the mortgage and the rent costs.

You can increase your share in the property later if you can afford to. The scheme is available on new-build properties, or on existing homes that are being sold through a housing association.

The First Homes scheme (only available in England) allows you to buy a home for 30% to 50% less than its market value. The homes must either be a new build or one that was originally bought as part of the scheme.

To be eligible for the scheme, you must be 18 or older, a first-time buyer, able to get a mortgage for at least half the price of the home and have an annual household income of £80,000 or less (£90,000 in London).

The aim of the Mortgage Guarantee scheme (introduced in April 2021) is to increase the number of 95% mortgages available in the market. Through it, the government offers lenders the financial guarantees they need to provide these higher LTV deals for properties up to £600,000.

The scheme was originally due to run until December 2022 but has been extended to the end of 2023.

The Right to Buy scheme offers council tenants the chance to purchase the house or flat they are living in, often below market value. This is only available in England (and Northern Ireland, in a slightly different format). Right to Acquire is a similar scheme for housing association tenants.

You may be able to apply to buy your council home if it's your only or main home, it's self-contained, you're a secure tenant and you've had a public sector landlord for at least 3 years.

The Help to Buy scheme is now only available in Wales. For those who meet the eligibility requirements, the government provides an equity loan to first-time buyers to assist them with purchasing a property. This is only available for new-build properties.

With Help-to-Buy – Wales, you must provide a deposit worth 5% of the property price. You then get a shared equity loan of up to 20% of the purchase price. You take out a repayment mortgage to cover the remaining amount.

A Lifetime ISA offers a 25% tax-free bonus to savings to help you build a deposit for your first home. You can save a maximum of £4,000 a year (meaning the maximum bonus available is £1,000 per year). You must have held one for a year before using the money to buy your first home, and it's only available on homes worth up to £450,000.

If you don't use the funds for your first home, you can also use them for retirement. But if you withdraw the money for any other reason then you may lose the bonus amount and face penalties on your savings as well.

What else should I consider when getting a mortgage for my first home?

If you're thinking about buying your first home, a key thing to be aware of at the moment is the economy and its impact on the mortgage and housing market.

In order to address rising inflation, the Bank of England base rate has risen several times since December 2021. This has resulted in an increase in interest rates, making borrowing more expensive.

This increase in mortgage rates means monthly repayments are more expensive than they would have been a few years ago. It's worth checking your finances and being absolutely sure you can afford the mortgage you're applying for.

An independent mortgage broker can look across lenders to find you the lowest possible rate, and also take your affordability and financial circumstances into account to help you budget for your first home.

Need more help?

When should I apply for my first mortgage?

You only need to submit a formal application for a mortgage once you've had an offer accepted on your first home.

But when you start to look for a property, you might want to consider getting an agreement in principle (AIP) from a broker or lender. Also known as a mortgage in principle or decision in principle, this document outlines what a bank or building society may be able to lend you based on the details you've provided.

It isn't a guarantee that they'll loan you this money, but it gives you an idea of what you're likely to be able to afford. Some estate agents only take your offers on homes seriously if you have one.

What is a first-time buyer?

First-time buyers have never owned a residential property before in the UK or abroad. You won't be seen as a first-time buyer if you've part owned a property, you're buying one with someone who has owned one before, you've inherited a home, or someone else is buying it for you.

What is a guarantor mortgage?

Guarantor mortgages for first-time buyers work by another person, usually a friend or family member, agreeing to cover the monthly repayments if you can't.

This may help you get a mortgage you otherwise can't. But it's important to remember that this puts your and their finances at risk if the repayments aren't met.

What is a joint mortgage?

A joint mortgage works in a similar way to a mortgage for 1 person. It means 2 or more people (some lenders allow up to 4) can borrow money from a lender to buy a property together.

This allows you to put down a bigger deposit and borrow more.

Everyone on the mortgage is liable for the debt so it's important to make sure everyone is comfortable making their share of the repayments.

Should I buy a freehold or leasehold for my first home?

A freehold property means you own the building and the land it is on. This is the case for most houses.

If it's a leasehold you own the property but not the land it's on. If it's a flat, for example, you usually own the flat but not the building.

The best option for you depends on your circumstances. There are pros and cons of each and some home ownership schemes, such as Shared Ownership, are only available with leasehold properties.

What’s the difference between repayment and interest-only mortgages?

A repayment mortgage means you pay off the interest and a bit of the loan each month, while an interest-only mortgage means you only pay off the interest.

At the end of a repayment mortgage, you should own your property outright. But at the end of an interest-only mortgage, you still need to repay the money you borrowed from the lender. If you don't have the money available to do so, you may need to sell the house or other assets.

Most residential mortgages (particularly for your first home) are taken out on a repayment basis, with interest-only options being far rarer due to their riskier nature.

But buy-to-let mortgages are more commonly taken out on an interest-only basis. This is because landlords are more comfortable selling the property to cover the loan a the end of the mortgage term, if they need to.

Should I consider a longer term mortgage?

Most full mortgage terms are around 25 to 30 years but you can get longer or shorter terms. The maximum mortgage term offered is normally 40 years.

Stretching your mortgage over a longer term means lower monthly repayments. But it does mean you pay more in interest overall, compared to a shorter term mortgage.

Whether a longer term mortgage is right for you depends on your personal financial situation, and it might be helpful to speak to a broker for advice.

Can I get a first-time buyer mortgage if I’m self employed?

Yes, you may be able to get a mortgage for your first home if you're self employed. Just like an employee, whether a bank or building society lends to you depends on your individual financial circumstances.

There are slightly different requirements in terms of how you evidence your annual income when you're self-employed. The documents needed are normally:

  • 2+ years of certified accounts
  • SA302 forms for the past few years
  • Proof of future contracts (for contractors)
  • Proof of dividend payments or retained profits (if you're a company director)
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What our expert says

Buying your first home can be an exciting but stressful experience, so it's important to get as much expert help as you can. Speaking to one of our Mojo mortgage experts can help take the hassle out of the home buying process and get you the right deal for you and your circumstances.

Page last reviewed: 30 May 2023

Reviewed by: Claire Flynn


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