In this guide
Buying your first home is an exciting milestone, but it can also feel overwhelming if you've never dealt with mortgages before.
There are several steps involved before you finally get the keys to your new property, and understanding the process early can make the experience much smoother.
Most first-time buyers go through the same basic stages:
- Understanding how much you may be able to borrow
- Saving your deposit
- Getting a Decision in Principle
- Finding a suitable property
- Applying for a mortgage
- Completing the legal process and moving in
In this guide we explain how each stage works so you know what to expect.
What Is a First-Time Buyer?
A first-time buyer is generally someone who has never owned a residential property before, either in the UK or abroad.
Being a first-time buyer can sometimes provide advantages. Certain lenders offer mortgage products designed specifically for first-time buyers, and depending on the purchase price of the property you may also qualify for tax relief.
Understanding your status as a first-time buyer can help determine which mortgage options may be available to you.
How Much Deposit Do You Need?
Your deposit is the upfront amount you contribute towards the purchase of your home.
Some lenders offer mortgages with deposits as low as 5% of the property value, although the exact options available depend on your financial circumstances.
| Property Price | 5% Deposit | 10% Deposit |
|---|---|---|
| £200,000 | £10,000 | £20,000 |
| £300,000 | £15,000 | £30,000 |
The larger your deposit, the lower your loan-to-value (LTV) ratio. This can sometimes give you access to more mortgage products and better interest rates.
Even 1% more deposit can unlock better mortgage rates. If you're close to a deposit milestone (e.g. 10%, 15%), it could be worth saving a little extra.
Our mortgage advisors can help identify lenders that may work with your deposit size and explain which options may suit your circumstances.
Detailed guide · 5 min read
How Much Could You Borrow?
Mortgage lenders look at several factors when deciding how much they may be willing to lend.
These typically include:
- Your income
- Your regular spending
- Existing loans or credit commitments
- Credit history
- Future affordability if interest rates increase
Traditionally many lenders offer mortgages of around 4 to 4.5 times your annual income, although some lenders offer higher borrowing limits for certain borrowers.
Some mortgage products allow eligible buyers to borrow more than the typical income multiple, which can increase the price range they are able to consider.
How Much Could You Borrow?
Based on 4.5x income. Individual lenders may vary.
Our mortgage advisors can review your income, deposit and financial commitments to help identify lenders that may offer borrowing levels suited to your circumstances.
Want to know exactly how much you can borrow?
What Is a Decision in Principle?
A Decision in Principle (DIP) — sometimes called an Agreement in Principle (AIP) — is a statement from a lender indicating how much they may be willing to lend you.
It is not a full mortgage approval, but it can be helpful when you start viewing properties.
A Decision in Principle can:
- Give you a clearer idea of your budget
- Show estate agents that you are a serious buyer
- Help speed up the mortgage application later
Our mortgage advisors can arrange a Decision in Principle for you and help identify lenders that may be suitable based on your circumstances.
Government Support for First-Time Buyers
There are several schemes designed to help first-time buyers purchase their first property.
Lifetime ISA
A Lifetime ISA allows you to save towards your first home while receiving a 25% government bonus on your savings.
You can save up to £4,000 per year, and the government will add up to £1,000 annually.
First Homes Scheme
The First Homes Scheme allows eligible buyers to purchase certain new-build homes at a discount of at least 30% off the market value.
Eligibility criteria may apply depending on income levels and local authority requirements.
Our mortgage advisors can help explain which schemes may be available and whether any lenders support these options.
Lender Schemes That May Help You Buy
Alongside government initiatives, many lenders offer mortgage products designed to support first-time buyers.
These may include:
- Higher income multiple mortgages
- Family assisted mortgages
- Low deposit mortgage products
- Cashback mortgage offers
- Developer supported mortgage deals
Because lenders use different criteria and regularly introduce new products, comparing lenders can be important.
Our mortgage advisors can compare lenders across the market and help identify schemes that may improve your borrowing potential or help you purchase sooner.
Other Costs First-Time Buyers Should Budget For
Your deposit is only one part of the cost of buying a property.
You should also budget for:
- Solicitor or conveyancing fees
- Mortgage arrangement fees
- Property surveys or valuations
- Moving costs
- Stamp Duty depending on the purchase price
Stamp Duty for First-Time Buyers
First-time buyers pay no stamp duty on properties up to £300,000.
Detailed guide · 7 min read
What Happens After Your Offer Is Accepted?
Once your offer is accepted, the mortgage and legal processes begin.
You will submit a full mortgage application and provide documents such as proof of income and bank statements.
Your solicitor or conveyancer will also begin the legal work, including property searches and reviewing contracts.
If the lender approves the application, they will issue a formal mortgage offer, and the purchase can move towards exchange of contracts and completion.
What Will Your Monthly Payments Be?
Based on a 25-year repayment mortgage.
Our mortgage advisors will guide you through each stage and work with your lender and solicitor to help keep the process moving smoothly.
Need help navigating the mortgage process?
How Our Mortgage Advisors Can Help
Buying your first home can feel complicated, especially if you are unfamiliar with how mortgages work.
Our mortgage advisors can help by:
- Comparing mortgages from a wide range of lenders
- Explaining how much you may be able to borrow
- Identifying schemes that could improve affordability
- Guiding you through the mortgage application process
Having expert support can make the process much easier and help ensure you understand your options before making important financial decisions.
