Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
What first-time buyer lenders look at
First-time buyer status opens some products the rest of the market cannot use, such as high loan to value deals and some Shared Ownership leases, but it does not relax affordability. The lender still has to be satisfied you can pay the mortgage, including if rates rise.
Three things carry most weight: the deposit as a percentage of the price, household income against the size of the loan, and your existing monthly commitments. Credit history sits behind those.
How the deposit changes your options
Lenders price mortgages in loan to value (LTV) bands. As your deposit grows, you move into lower LTV bands, where more lenders compete and rates are usually lower.
- 5% deposit (95% LTV) — the smallest choice of lenders and typically the highest rates.
- 10% deposit (90% LTV) — noticeably more lenders and usually a step down in rate.
- 15% deposit (85% LTV) — most mainstream lenders compete.
- 25% or more (75% LTV or less) — generally access to the lowest rates for a given product.
- Many lenders accept a gifted deposit from family if it is documented as a genuine gift with no repayment expected. Borrowing a deposit through a personal loan is usually viewed negatively.
Schemes that can help
The Help to Buy equity loan scheme in England has closed to new applications. Options still used by first-time buyers include:
- Shared Ownership — you buy a share of a property and pay rent on the rest. The mortgage only covers the share you buy, which is why the deposit can look small compared with the full price.
- Lifetime ISA — a savings account that adds a government bonus to money saved for a first home, subject to its own rules and limits.
- High loan to value mortgages — mainstream products rather than a government scheme, available from some lenders.
- Scotland, Wales and Northern Ireland run their own schemes with different rules, so check what applies where you are buying.
Costs beyond the deposit
- Stamp duty or land tax — first-time buyer relief applies in England and Northern Ireland up to a threshold that can change; Scotland and Wales have their own land taxes. Check the current rules for where you are buying.
- Legal and conveyancing fees, plus searches.
- Survey — the lender's valuation protects the lender, not you. A homebuyer report or full building survey is a separate cost.
- Product or arrangement fees — sometimes added to the loan. A no-fee deal at a slightly higher rate can work out cheaper than a lower rate with a large fee, so compare the total cost.
- Broker fees, if you use a broker that charges one.
Getting help
A regulated mortgage broker can search lenders for you and explain which products fit your circumstances. MoneyHelper (moneyhelper.org.uk) has free, impartial guides to buying your first home and budgeting for the costs.
First-time buyer mortgages guides
Common questions
How much deposit do I need as a first-time buyer?
How much deposit do I need as a first-time buyer?
Some lenders offer 95% loan to value mortgages, which means a 5% deposit, though these usually cost more and fewer lenders offer them. Each extra step of deposit widens the choice and usually lowers the rate.
How much can a first-time buyer borrow?
How much can a first-time buyer borrow?
Lenders typically lend a multiple of household income, but they also test affordability against your monthly outgoings and existing commitments, 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. Options that remain include Shared Ownership, the Lifetime ISA for saving a deposit, and high loan to value mortgages from mainstream lenders. Schemes in Scotland and Wales differ.
Can I get a first-time buyer mortgage with bad credit?
Can I get a first-time buyer mortgage with bad credit?
Sometimes, but high loan to value products and adverse credit rarely go together. A specialist lender may consider the case with a larger deposit, particularly if the issues are settled and not recent. See our bad credit mortgages page for how lenders treat different issues.
Should I choose a 2-year or 5-year fix?
Should I choose a 2-year or 5-year fix?
A shorter fix leaves you free to remortgage sooner if rates fall or your circumstances improve. A longer fix gives certainty over your payments for longer if rates rise. Which suits you depends on your budget and how much payment certainty you need.
Can I use a gifted deposit?
Can I use a gifted deposit?
Many lenders accept a gifted deposit from family, usually with a signed letter confirming it is a gift with no expectation of repayment and no stake in the property. Each lender has its own rules.
What other costs should I budget for?
What other costs should I budget for?
Stamp duty or land tax (though first-time buyer relief may apply), legal fees, a survey, any product fee, moving costs and any broker fee. Budget for these separately from the deposit.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Important: This page is general information, not financial advice or a personal recommendation. Product features and eligibility vary by provider — check the provider's own terms before you buy or apply. Deposit requirements, income multiples and scheme eligibility vary between lenders and change over time.