A first-time buyer is someone who has never owned a residential property. In the UK, first-time buyers typically need a 5–10% deposit and can borrow 4–5.5 times their annual income, with government schemes like Shared Ownership and the Lifetime ISA available to help.
What Is a First-Time Buyer?
A first-time buyer is someone who has never owned a residential property in the UK or abroad. If you've only ever owned a commercial property without a living space, you still qualify as a first-time buyer.
However, you won't be classified as a first-time buyer if you've inherited a home (even if you never lived in it), if the person you're buying with has previously owned property, or if a parent who owns property is purchasing on your behalf.
How Much Deposit Do You Need?
Most lenders require a minimum deposit of 5–10% of the property's purchase price. For a £250,000 home, that means saving £12,500–£25,000. The larger your deposit, the lower your interest rate — lenders see a bigger deposit as lower risk.
Deposit Examples (£250,000 Property)
See our mortgage deposit guide for more details on saving strategies and gifted deposits.
How Much Can You Borrow?
Most lenders offer 4–4.5× your annual income, provided you meet their affordability criteria. Some stretch to 5–6× income for stable professions (teachers, doctors, solicitors).
Several factors affect how much you can borrow:
- Your income — salary, bonuses, overtime, and any additional earnings
- Credit score — a clean credit history improves your options
- Existing debts — loans, credit cards, and other commitments reduce borrowing power
- Monthly outgoings — childcare, travel costs, subscriptions
- Employment type — permanent roles are favoured, but self-employed applicants with 2+ years of accounts are well catered for
See our mortgage affordability guide for detailed calculations.
The Mortgage Application Process
Buying your first home involves several stages:
- Save your deposit: Most lenders require 5–10% minimum.
- Check your affordability: Lenders assess income, outgoings, and debts.
- Get an Agreement in Principle (AIP): Involves a soft credit check, valid for 30–90 days.
- Find your property: Start house hunting within your budget.
- Make an offer: Submit an offer to the seller.
- Submit your full application: Hard credit check, affordability review, and stress test.
- Property valuation: Your lender values the property. Consider a homebuyer survey too.
- Conveyancing: A solicitor handles the legal side.
- Exchange and complete: Contracts are exchanged and you get your keys.
Types of First-Time Buyer Mortgage
- Fixed-rate mortgage: Rate locked in for 2–5 years. Perfect for budgeting certainty.
- Tracker mortgage: Rate follows the Bank of England base rate. Great when rates are low.
- Standard Variable Rate (SVR): Your lender's default rate — almost always more expensive than other options.
- Discount mortgage: A set discount off your lender's SVR for a period.
- Offset mortgage: Links savings to reduce interest. Requires a larger deposit (usually 20–25%).
Government Schemes for First-Time Buyers
- Shared Ownership: Buy 10–75% and pay rent on the rest to a housing association.
- First Homes Scheme: 30–50% discount. Max price £250,000 (£420,000 in London).
- Right to Buy: Council tenants buy their home at a discount.
- Lifetime ISA: Save up to £4,000/year, get 25% government bonus (up to £1,000/year).
- Mortgage Guarantee Scheme: Buy with just 5% deposit, government guarantees a portion.
- Deposit Unlock: Developer-insured scheme for 5% deposit on new builds.
Other Options to Consider
- Guarantor mortgages: A family member provides collateral to cover payments if you can't.
- Family springboard mortgages: A relative deposits savings with the lender to support your application.
- 95% or 100% LTV mortgages: Very high loan-to-value products — fewer options but available.
- Builder deposit schemes: Developers contribute towards your deposit (typically up to 5%).
What Interest Rates to Expect
Rates for first-time buyers vary depending on deposit size, credit history, income, and deal type. The more equity (deposit) you have, the better rates you'll access.
Rates change frequently, so the best approach is to speak with an advisor who can compare current deals across the whole market for your specific situation.
Don't just compare headline rates — look at the total cost including arrangement fees, valuation fees, and cashback offers.
Frequently Asked Questions
- Can I get a buy-to-let mortgage as a first-time buyer?
- It's possible, but eligibility is stricter. You'll need a larger deposit, and the minimum age is usually 21–25. You won't qualify for government schemes, so working with a specialist broker is essential.
- Should I buy freehold or leasehold?
- With a freehold, you own the property and the land. With a leasehold, you own the property for the length of the lease but not the land. Houses are typically freehold; flats are usually leasehold. Both have pros and cons worth discussing with your solicitor.
- When do I start paying my mortgage on a new build?
- You pay the deposit when you exchange contracts but won't start mortgage payments until the month after completion. If buying off-plan, a broker can help navigate potential delays.
- How long does the mortgage process take?
- From application to completion, the process typically takes 8–12 weeks. Having your documents ready and working with an experienced broker can help speed things up.
Sources & References
- Stamp Duty Land Tax: First-Time Buyers Relief — HM Revenue & Customs
- Shared Ownership Scheme — GOV.UK
- Lifetime ISA — GOV.UK
- First-Time Buyer Mortgage Guide — MoneyHelper (FCA)
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