Thinking of buying your first home, but not sure where to start? This guide breaks the process into clear, simple steps so you can move forward with confidence. From understanding deposits and mortgage types to checking what you can afford and navigating Stamp Duty, everything you need is explained in one place.
Whether you are just beginning to explore your options or getting ready to make your first offer, this is the perfect starting point for understanding how the journey works and what to expect at each stage.
1. What it means to be a first-time buyer
A first-time buyer is someone who has never owned a residential property before, either in the UK or overseas. Even though you are called a first-time buyer, it essentially means first-time homeowner.
You may not be considered a first-time buyer if you have:
- Inherited a property
- Been gifted a property
- Owned a home at any point in the past, even many years ago
Some lenders may still offer you certain first-time buyer products if it has been a long time since you owned a property. However, government schemes usually require that you have never owned any property.
Find out how much you could borrow
Enter your income and deposit amount to estimate your borrowing power. This gives you a clearer idea of the types of homes that may be within reach.
How much could you borrow?
2. Understanding the mortgage essentials
A mortgage is a loan used to buy a home or piece of land. You contribute a deposit, and the lender covers the remaining cost.
For example:
If a home costs £250,000 and you have a £12,500 deposit, the remaining £237,500 is provided by the lender.
Because the mortgage is secured against the property, the lender can take possession of the home if repayments are not maintained. This only happens in extreme circumstances.
Mortgage terms
Your mortgage term is the length of time you take to repay the loan. A typical term is between 25 and 30 years, but lenders also offer terms as short as 2 years and as long as 40 years.
- A longer term usually means lower monthly payments but higher overall interest
- A shorter term usually means higher monthly payments but lower total interest over time
Types of mortgage repayment
Repayment mortgage
Your monthly payment reduces both the loan and the interest. At the end of the term, the mortgage is fully repaid. This is the most common option for first-time buyers.
Interest-only mortgage
Your monthly payments cover the interest only. The full loan must then be repaid in one lump sum at the end of the term. This type is less common for first-time buyers and requires a clear repayment plan.
Interest rates: fixed, variable and tracker
Fixed rate
Your interest rate stays the same for the length of the deal, typically 2, 5 or 10 years. This provides predictable monthly payments.
Variable or tracker rate
Your interest rate can move up or down. Tracker mortgages track the Bank of England base rate, so your monthly payments can change with market conditions.
See what deals are possible for you
We are not tied to any lender, which means you get whole of market access and exclusive deals that may not be available directly.
View today’s ratesResidential mortgage rates
Based on a mortgage of £150,000 at a 50% LTV, for illustration only.
3. Understanding Loan to Value (LTV)
LTV compares the size of your mortgage to the property’s value.
Example:
- Home price: £250,000
- Deposit: £25,000 (10%)
- Mortgage: £225,000 (90% LTV)
Lower LTV usually means better interest rates because the lender is taking on less risk. Some of the best rates are available at 60% LTV, which means a 40% deposit.
LTV CALCULATOR GRAPHIC
4. How much deposit do you need?
Most first-time buyers start with a deposit of 5 to 10%. A higher deposit often gives you access to more competitive mortgage deals and lower monthly payments.
If saving is slow, consider a Lifetime ISA for a 25%government bonus, or explore schemes such as Shared Ownership.
5. Making sure you can afford the monthly payments
Before you begin viewing properties, take time to understand what you can afford each month. Your mortgage will be one part of your expenses, alongside utilities, food, transport, council tax, insurance and unexpected costs.
A realistic monthly budget helps you avoid stretching yourself too far.
6. The other costs of buying a home
In addition to your deposit and monthly mortgage payments, there are extra costs involved, including:
- Home survey
- Solicitor or conveyancing fees
- Mortgage product and application fees
- Valuation fees
- Buildings insurance
- Moving costs
- Stamp Duty or other land taxes
Budgeting for these costs early helps prevent delays or surprises later.
7. Getting a mortgage as a first-time buyer
You can apply for a mortgage:
- Directly with a bank or building society
- Through a regulated mortgage adviser or mortgage broker
Many first-time buyers choose a broker because advisers compare deals across the market and help match you with lenders that suit your financial situation. This is particularly useful if you have a small deposit, are self-employed or are purchasing through a scheme such as Shared Ownership.
You will need to provide documents that show your income, debts and spending. Self-employed applicants usually need two to three years of accounts or tax returns.
Mortgage document checklist
| ICON | Document type | What you need | Purpose |
| Proof of identity | Passport or driving licence | Confirms your identity for the lender | |
| Proof of address | Recent utility bill, council tax bill or bank statement | Confirms your current residential address | |
| Payslips | Last three months of payslips, plus details of bonuses or commission if relevant | Shows your regular income and employment stability | |
| Bank statements | Recent statements showing income, spending and savings activity | Helps lenders assess affordability and financial behaviour | |
| Proof of deposit | Savings statements or a gifted deposit letter | Confirms where your deposit is coming from | |
| Self-employed documents (if applicable) | Two to three years of tax returns or accountant-prepared accounts | Provides evidence of self-employed income and stability |
8. Freehold and leasehold explained
When you buy a home, it will be either freehold or leasehold.
Freehold
You own the property and the land it sits on. This is more common for houses.
Leasehold
You own the property but not the land. You hold the property for a fixed number of years and usually pay ground rent and service charges. This is common for flats.
A lease term of less than 90 years can create challenges when you want to sell or remortgage. A lease of less than 80 years is particularly important to avoid, as lease extensions become significantly more expensive. Many lenders will not lend on a lease with fewer than 70 years remaining.
Always check the lease before making an offer.
GRAPHIC A LEASE LENGTH VISUAL METER SHOWING GREEN FOR 125 YEARS AND ABOVE, AMBER FOR 90 TO 80 YEARS AND RED FOR UNDER 80.
9. Stamp Duty for first-time buyers in England and Northern Ireland
Eligible first-time buyers receive a reduced Stamp Duty rate.
The rules are as follows:
- 0% on the portion of the price up to £300,000
- 5% on the portion of the price between £300,001 and £500,000
If the property is valued above £500,000, you cannot claim first-time buyer relief and must pay the standard Stamp Duty rates.
STAMP DUTY CALCULATOR
10. Schemes that can help first-time buyers
Several schemes exist to support first-time buyers, especially those with smaller deposits.
These schemes include:
- Shared Ownership
- First Homes scheme
- New-build developer incentives
- Local authority support options
A mortgage adviser can help you understand which schemes you qualify for and whether they fit your long-term goals.
First-time buyer schemes
| Scheme | Eligibility | Deposit required | How it works | Key benefit | Things to consider |
| Shared ownership | First-time buyers or previous homeowners who cannot afford a full property. Income under £80,000, or £90,000 in London. | Usually 5 to 10% of the share you are buying. | You buy a share of the home and pay rent on the remaining share to the housing association. | Lower upfront deposit and a smaller mortgage. | You pay rent and service charges. Staircasing can be costly. Selling can be more complex. |
| First homes scheme | First-time buyers only. Income under £80,000 outside London and under £90,000 in London. Often prioritises local residents or key workers. | Minimum 5%. | You buy a new-build home at a permanent discount of 30 to 50%. | Significantly reduced purchase price. | Limited availability. Only applies to specific new-builds. Must resell with the same discount. |
| Developer incentives | First-time buyers purchasing a new-build property. | Typically 5 to 10% depending on lender and builder incentives. | Developers offer support such as deposit contributions, cashback or covering legal fees. | Reduces upfront costs and makes new-builds more affordable. | Incentives may affect lender choice. New-builds can carry a pricing premium. |
| Local authority and regional support | Varies by region. Often for key workers, local residents or lower-income buyers. | Sometimes lower than standard requirements. Some schemes offer no-deposit routes. | Councils and housing providers offer shared equity or discounted purchase options. | Flexible routes into homeownership tailored to local buyers. | Availability varies. Resale restrictions may apply. Often limited to specific postcodes. |
Bringing it all together
Buying your first home involves many new concepts, but once you understand deposits, LTV, mortgage types, affordability and the related taxes, the journey becomes clearer. With preparation, supportive tools and the right advice, you can approach each stage with confidence and make informed decisions about one of the biggest steps in your financial life.
