What first-time buyer lenders actually look at
A first-time buyer mortgage is a residential purchase where neither applicant has owned a property before. That status opens a few products the rest of the market cannot use — 95% LTV deals, some Shared Ownership leases, and lender-specific first-time buyer rates — but it does not relax affordability. The lender still has to believe you can pay the mortgage after the introductory rate ends.
Three numbers decide the case: the deposit as a percentage of the price, household income against the loan, and existing monthly commitments. Credit history sits behind those. A clean file with a 5% deposit is a 95% LTV product. The same file with 15% down is a much wider, cheaper panel.
Deposit bands, and what they buy you
| Deposit | Typical LTV | What changes |
|---|---|---|
| 5% | 95% | Smallest lender pool, highest rates. Viable, not cheap. |
| 10% | 90% | Noticeably more lenders and a step down in rate. |
| 15% | 85% | Most high-street lenders compete. Often the best value jump. |
| 25%+ | 75% or less | The keenest pricing on the market for a given term. |
Bands are indicative. A gifted deposit from family is accepted by many lenders if it is documented as a genuine gift with no repayment expected. Using a personal loan to manufacture a deposit is treated as a red flag.
Schemes that still exist
Help to Buy as an equity loan in England is closed. Talking about it as a live option is how first-time buyers waste months. What is still used:
- Shared Ownership — you buy a share of a new-build or resale property, typically 25–75%, and pay rent on the rest. The mortgage is only on the share you own, which is why the deposit can look small against the full price.
- Lifetime ISA — a deposit-saving wrapper, not a mortgage. The government bonus is useful if you already have one; opening one to buy in the next few months rarely beats just saving the cash.
- 95% LTV mortgages — mainstream products, not a government scheme. They exist in most rate cycles, at a premium to 90% deals.
Scotland and Wales run their own schemes with different names and rules. If the property is outside England, say so at the start — the product list changes.
Costs beyond the deposit
- Stamp duty — first-time buyer relief applies in England and Northern Ireland up to a threshold that changes; Scotland and Wales have their own land taxes. Check the current figure for the nation you are buying in.
- Solicitor and conveyancing — typically £800–£1,500 plus searches.
- Survey — the lender's valuation protects the lender, not you. A homebuyer report or full survey is a separate cost.
- Broker fee — if you proceed, the adviser handling the case charges £499 on completion. It is shown next to every rate and included in the total repayable before you apply.
- Product fee — £0–£2,000, sometimes added to the loan. A higher-rate, no-fee deal can be cheaper than a headline rate with a large fee. Compare the total cost, not the rate alone.
Common questions
How much deposit do I need as a first-time buyer?
How much deposit do I need as a first-time buyer?
A number of high-street lenders still offer 95% loan-to-value deals, which means a 5% deposit. Those products cost more than a 10% or 15% deposit would, and the lender pool is smaller. Every extra percent of deposit you can put down widens the choice and usually cuts the rate by more than any other single change you can make.
How much can a first-time buyer borrow?
How much can a first-time buyer borrow?
Most lenders work to 4–4.5 times household income. A few specialists go to 5 or 5.5 times for higher earners with low existing commitments. Affordability is also tested against your monthly outgoings, so two applicants on the same salary can be offered very different amounts.
Is Help to Buy still available?
Is Help to Buy still available?
The Help to Buy equity-loan scheme in England has closed to new applications. What remains for first-time buyers is Shared Ownership, the Lifetime ISA (for deposits, with its own rules), and 95% LTV mortgages from mainstream lenders. Schemes in Scotland and Wales differ — an adviser will tell you which, if any, apply to the property you are buying.
Can I get a first-time buyer mortgage with bad credit?
Can I get a first-time buyer mortgage with bad credit?
Sometimes, but 95% LTV and adverse credit rarely sit on the same product. A specialist lender may still help if the deposit is larger — typically 10–15% or more — and the issues are settled and not recent. See our bad credit mortgages page for how lenders rank different issues.
Should I get a 2-year or 5-year fix?
Should I get a 2-year or 5-year fix?
A two-year fix is cheaper on day one and leaves you free to remortgage sooner if rates fall or your circumstances improve. A five-year fix costs more initially and protects you if rates rise. First-time buyers who are stretching to the maximum they can afford usually prefer the certainty of a longer fix; those with a buffer often take the shorter one.
Will checking eligibility affect my credit score?
Will checking eligibility affect my credit score?
No. The initial check is a soft search, visible only to you. A hard search happens only when you formally apply with a chosen lender, and that is flagged before it does.
Related
Deposit, income multiples, Shared Ownership and the application timeline.
Income multiples, stress tests and worked examples.
Defaults, CCJs and arrears — what specialist lenders still accept.
Purchase, remortgage, buy to let and first-time buyer in one place.
Important: Information on this page is for guidance only and does not constitute financial advice. Deposit requirements, income multiples and scheme eligibility vary between lenders and change over time. Your home may be repossessed if you do not keep up repayments on your mortgage. CleverCompare is an introducer appointed representative of Charles Frank Finance Limited, which is authorised and regulated by the Financial Conduct Authority.