First-time buyer mortgages

How to get a mortgage as a first-time buyer

Getting your first mortgage may seem scary, but here's generally what to expect.

• Save a big enough deposit - you usually need at least 5% of the property price. You can use our mortgage repayment calculator to find out how much you can borrow.
• Apply for a mortgage in principle (MIP) - also known as an agreement or decision in principle. You usually need this before you start house-hunting so you can get an idea of what kind of houses you can afford. You can get a MIP from a broker like Mojo Mortgages, a bank, or a lender.
• Make a formal mortgage application - Once you've found a house you're happy with, you need to make a formal application. If you talk to our partner, Mojo, they can take the hassle out and apply for the mortgage on your behalf. They'll also help you find the best first-time buyer mortgage for your circumstances.

If you want to know more, follow our step-by-step guide to buying your first house.

What mortgage is best for first-time buyers?

There's no 'best' first-time buyer mortgage, as it largely depends on your personal circumstances. But there are different types of mortgage rates you choose that may best suit you.

• A fixed rate mortgage - this type of 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.
• A variable rate mortgage - This is when the rate is likely to change during your deal period. If rates fall, you could benefit from lower payments during your deal. But you must 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. 

What schemes are available for first-time buyers?

• First Homes scheme - Only available in England, this scheme 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. 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).
• Mortgage Guarantee scheme - Aims 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. This scheme ends June 2025.
• 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 need to have had it 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.