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Calculate your affordability as a first-time buyer.
Compare the latest first-time buyer mortgage rates.
Understand the first home buying process & secure the best mortgage.
Get informed: Explore our first-time buyer guides & calculators.
Discover how these mortgages work, eligibility requirements, and the steps involved in the homebuying journey.
What is a first time buyer mortgage?
A first-time buyer mortgage is designed specifically for those who have never owned property before. It often comes with perks like lower deposit requirements and access to government-backed schemes, such as Help to Buy or Shared Ownership, to make purchasing your first home more affordable and manageable.
How do first time buyer mortgage work?
First-time buyer mortgages are based on your income, outgoings, and credit score to determine how much you can borrow. You’ll usually need a deposit starting from 5%. Lenders offer repayment mortgages (principal + interest) and interest-only options. Some schemes allow up to 100% borrowing if supported by a guarantor or family-assisted option. Choosing the right mortgage depends on your long-term financial plans.
How Much Can I Borrow?
Discover your borrowing potential. Our calculator helps you estimate how much you might qualify for, providing a starting point for your search.
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What are the current interest rates for first-time buyers?
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Do first time buyers pay Stamp Duty?
For first time buyers in England and Northern Ireland, the threshold for paying Stamp Duty is much higher due to the government’s relief scheme. Standard Stamp Duty rates apply if the property is worth more than £625,000.
| Minimum property | Maximum property price | Stamp Duty rate |
|---|---|---|
|
£0
|
£425,001 |
0% |
|
£425,000
|
£625,000 |
5% |
|
£625,000
|
£1,500,000 |
10% |
|
£1.5m+ |
– |
12% |
You only pay tax on the amount above the threshold. If you were to buy a home for £429,000, as a first time buyer, you’d only pay 5% tax on the £4,000 that falls above the £425,000 threshold.
First Time Buyer Stamp Duty Calculator
What is the Mortgage Application Process for First-Time Buyers?
The mortgage application process involves several steps:
Mortgage Agreement in Principle (AIP):
- An AIP gives you an estimate of how much you can borrow and shows sellers you're a serious buyer. It’s based on a preliminary assessment of your financial situation but isn't a final offer.
Find a Property:
- Start house hunting once your AIP is secured. Look for properties within your budget. Your mortgage advisor can guide you through this stage.
Full Mortgage Application:
- After your offer is accepted, submit a formal mortgage application. You'll need documents like proof of income, bank statements, and ID. The lender will perform an in-depth check of your finances.
Valuation and Survey:
- The lender will carry out a property valuation to ensure the property’s value aligns with the mortgage amount you're borrowing. This step helps them determine if the property provides sufficient security for the loan. You may also choose to conduct additional checks to ensure there are no major issues with the property before proceeding with the purchase.
Mortgage Offer:
- Once your application is approved, you'll receive a formal mortgage offer, including the terms and interest rates. Carefully review it before signing.
Legal Work:
- Your solicitor will conduct searches and check contracts. This includes ensuring there are no legal issues with the property title and any other obligations like planning permissions or covenants.
Completion:
- When all checks are complete, the lender transfers the funds to the seller, and you receive the keys. You are now a homeowner, and your mortgage repayments will begin.
By using a broker, you gain access to a wider range of mortgage products, benefit from expert guidance throughout the application process, and increase the likelihood of a positive outcome. Brokers help navigate the complexities of commercial mortgages, ensuring that your application is handled smoothly and effectively.
Why choose Mortgage.One?
- We keep things simple: No broker fees, ever. Lenders compensate us directly for our services, empowering you to focus on finding your dream home. Start exploring your options and potential costs with our mortgage calculator.
- Proven Track Record: We've helped number of families find their perfect home. See our client testimonials.
- Wide Range of Options: We analyze countless mortgage options, finding the ideal rates and terms that fit your budget and goals. Start exploring, compare your choices & apply online or over the phone.
- Navigate the Process with Clarity: Our comprehensive calculators help you compare mortgage options, understand costs, and analyze different scenarios. Make informed choices on the path to your dream home.
- Less Stress, More Joy: We handle the complexities of the mortgage process, saving you time and simplifying your homebuying experience. Focus on finding your dream home, not paperwork.
- Personalised Expert Support: : Work with dedicated mortgage advisors who provide personalized guidance tailored to your unique financial situation.
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The amount you can borrow depends on several factors, including your income, outgoings, credit score, and the size of your deposit. Lenders typically use affordability assessments to determine how much you can afford to borrow. This often involves a multiple of your annual income (e.g., 4 to 4.5 times your salary) and an evaluation of your financial commitments.
Several government schemes can assist first-time buyers, including:
- Help to Buys: Offers an equity loan to boost your deposit, available on new-build properties.
- Shared Ownership: Allows you to buy a share of a property (25% to 75%) and pay rent on the remaining share.
- Lifetime ISA: A savings account with a 25% government bonus on savings, which can be used towards purchasing your first home.
Lenders conduct thorough affordability assessments to determine how much you can borrow:
- Income Assessment: Evaluation of your income, including any bonuses or additional earnings.
- Expenditure Review: Assessment of your regular expenses, such as utility bills, groceries, and existing debts.
- Credit Check: Review of your credit history and score to gauge reliability in repaying debts.
First-time buyers can choose from various mortgage types:
- Fixed-Rate Mortgages: Interest rate remains the same for a set period, providing stable monthly payments.
- Variable-Rate Mortgages: Interest rate can change, typically in line with the Bank of England’s base rate, affecting monthly payments.
- Tracker Mortgages: A type of variable-rate mortgage that tracks the Bank of England’s base rate, plus a set percentage.
An Agreement in Principle (AIP) is a statement from a lender indicating how much they might be willing to lend you based on an initial assessment of your finances. It’s important because it shows sellers you are a serious buyer and gives you a clear idea of your budget when searching for properties.
Your credit score significantly impacts your mortgage application. A higher credit score can help you secure better interest rates and terms, while a lower credit score might limit your options or result in higher interest rates. It’s important to check your credit report and address any issues before applying for a mortgage.
A mortgage broker is a specialist who helps you compare and apply for mortgages, offering personalized advice based on your financial circumstances. They have access to a wide range of lenders, which can help you find better deals than going directly to a bank. With Mortgage.One, you benefit from expert mortgage advice without the added broker fees, making the process both cost-effective and simpler. Unlike other brokers who may charge fees, Mortgage.One is committed to fee-free, transparent service while providing the same wide range of mortgage options.
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