First-time buyer mortgages
Buying your first home can be a big step for you and your finances, and our guide to first-time buyer mortgages is here to help.
Find out how much you might be able to borrow, what type of first-time mortgage could work best for you, and compare rates from different lenders.
How to get a mortgage as a first-time buyer
1. Find out how much you can borrow
When looking for the best first-time buyer mortgage:
- Start by working out how much money you have for a deposit
- Find out how much you can borrow. You can get an initial idea by using our mortgage calculator.
Once you know what size of mortgage you could get, you can play around with the numbers, including:
- Deposit amount
- Property value
- Mortgage length
- Interest rate.
This can help you see what your monthly repayments could be for different first-time buyer mortgages in the UK.
2. Apply for a mortgage agreement in principle
A mortgage agreement in principle (AIP) is an agreement from a lender that it is, in principle, willing to offer you a certain amount. Having one can be really helpful when you’re house-hunting, as it gives you a realistic idea of your budget and shows estate agents and sellers that you’re a serious buyer.
Getting one involves a soft credit check, so it won’t leave a mark on your credit score. It’s also commitment-free, which means you don’t need to take the mortgage if you change your mind.
AIPs usually last for 60 to 90 days but, if yours is due to expire, you can simply reapply with the same mortgage lender or try a different provider.
3. Make a formal application for a mortgage
Once you’ve had an offer accepted on a property, you can formally apply for a first-time buyer mortgage. The provider will assess your application and your finances to confirm how much it can lend you.
This typically involves an affordability review and a hard credit check. The mortgage provider will look at a range of factors, including your:
- Salary and any other income
- Everyday spending, financial commitments and outgoings
- Credit history (to find out whether you’re a reliable borrower).
The lender will also want to conduct a valuation of the property, to check that it’s worth roughly what you want to pay for it.
You’ll usually get a final decision on your mortgage application within two to six weeks.
Did you know?
The Financial Conduct Authority (FCA)’s ‘responsible lending rules’ say that – unless your mortgage rate is fixed for at least five years – lenders must consider whether you could still afford your mortgage if your interest rate went up.
Stamp duty and mortgage rates latest: what you need to know
Stamp duty costs for many first-time buyers shot up in April after the thresholds changed. If you’re buying your first ever property, you’ll now pay stamp duty on any home costing more than £300,000, whereas the previous threshold was £425,000. That means you may need to find more money than you would have done before.
Find out more in our guide to stamp duty for first-time buyers.
In better news, mortgage rates fell in the spring, partly in reaction to the implementation of new global trade tariffs. And the lowest mortgage rates on the market were below 4% when we last checked on 11 June 2025. Average rates have also trickled down, according to a number of sources. However, you’ll usually still need a chunky deposit, as well as a good credit history, to get the lowest rates.
What is a first-time buyer?
When it comes to mortgages, you’re considered a first-time buyer if:
- You’ve never owned, inherited or been gifted a residential property or land in the UK or abroad, no matter how much it is worth
- You plan to live in the home you’re buying or want a buy-to-let property (though first-time buy-to-let mortgages can be trickier to secure).
You’re not a first-time buyer if:
- You’re buying a property with someone who owns, or has previously owned, a home
- You’ve inherited a home, even if you never lived there and it’s since been sold
- You buy a part share of a property from someone else and you now both jointly own the property
- Someone who already owns their own home, such as a parent or guardian, is buying a property for you.
Always check with your mortgage lender if you’re not sure whether you qualify for a first-time buyer mortgage.
How much deposit does a first-time buyer need?
Generally, a first-time buyer is expected to be able to put down a deposit of at least 5% of a property’s purchase price.
But taking out a 95% mortgage comes with risks:
- Usually, the smaller your deposit, the higher the mortgage rate you’ll have to pay
- If your property falls in value, you could end up owing more on your mortgage than the home is worth – this is called being in ‘negative equity’.
If you can save up a bigger mortgage deposit, you’ll own more of your first home from the get-go. And you’ll also be more likely to unlock lower first-time buyer mortgage rates, which could mean cheaper monthly payments.
The table shows how much you’d need to save for a deposit on a £280,000 home.
| Cost of property | Deposit percentage | How much needed |
| £280,000 | 5% | £14,000 |
| £280,000 | 10% | £28,000 |
| £280,000 | 15% | £42,000 |
Which type of first-time buyer mortgage is best for me?
The best first-time buyer mortgage for you depends on your budget, financial plans, and what kind of monthly payments you’re comfortable with.
Here’s a breakdown of the different types of mortgages for first-time buyers.
Fixed-rate mortgages
A fixed-rate mortgage is all about stability. Your interest rate is fixed for an agreed time – usually between two and five years, but it can go up to 15 years.
When a fixed-rate mortgage ends, you’ll normally move to the bank’s standard variable rate (SVR) if you don’t switch to a better deal.
Learn more about fixed-rate mortgages.
Tracker mortgages
Tracker mortgages have a variable rate based on the Bank of England (BoE) base rate plus a set number of percentage points (e.g. base rate + 1%).
They’re more of a risk than a fixed-rate deal but can work out well for first-time buyers if interest rates are low (and stay low). But your monthly payments will go up if rates rise, so make sure you’ve got wiggle room for this in your finances.
Learn more about tracker mortgages.
Standard variable rate mortgages
The standard variable rate is the rate you get moved onto at the end of your deal if you don’t remortgage.
It’s your lender’s basic rate of interest and can go up or down whenever the lender decides to change it. There’s no discount or reduced interest rate and your monthly repayments can jump around. If you don’t switch at the end of a fixed deal, you can end up on your lender’s SVR – and could see your monthly repayments rise sharply.
Learn more about standard variable rate mortgages.
Discount rate mortgages
Discount rate mortgages could be seen as a slightly kinder version of SVRs. You still follow the lender’s standard rate, but at a set discount.
For example, if the SVR is 7% and the discount is 1 percentage point, you’ll be charged an interest rate of 6%. The discount stays the same, but the actual interest rate can still move around.
Learn more about discount rate mortgages.
Capped mortgages
Capped mortgages have a variable rate linked to a lender’s SVR, but with a fixed upper limit. So even if interest rates swing wildly upwards, your payments won’t go above that cap. These may not be as commonly available as other mortgage types.
Learn more about capped mortgages.
Offset mortgages
Got some savings with the same provider as your mortgage? An offset mortgage allows you to use your savings to reduce the interest you pay on your mortgage.
Learn more about offset mortgages.
Ready to compare mortgages?
Search for our best mortgage rates for first time buyers to see what could be available to you. Start a first-time buyer mortgage comparison now.
| Free, impartial mortgage advice from our specialist partners L&C Mortgages Ltd** |
Get a mortgage quote in 2 minutes[1] |
[1] Correct as of June 2025.
Your home may be repossessed if you do not keep up repayments on your mortgage.
How much can I borrow with my first-time buyer mortgage?
How much you can borrow on a first-time buyer mortgage depends on your situation.
The mortgage provider will work out how much it thinks you can comfortably pay back each month. It’ll use that to give you a mortgage limit, based on:
- Your credit rating and financial history
- Your salary, along with any extra income
- Your outgoings, such as bills and regular spending
- How much you’ve saved for a deposit.
This information will be used by the lender to make sure you don’t overstretch your finances.
As a first-time home buyer, you’ll also need to think about:
- What might happen if rates go up in the future – could you still cover your mortgage payments?
- Whether you can realistically afford to repay the amount you want to borrow – ideally you’ll have money left over for savings or unexpected expenses.
Over 90,000 customers rated us on average 4.9 out of 5
As of July 8th 2025, Compare the Market had an average rating of 4.9 out of 5 from 93,668 people who left a review on Trustpilot. The score 4.9 corresponds to the Star Label ‘Excellent’. Learn more about our rating
Which schemes are available to help first-time buyers?
The government supports a range of schemes for first-time buyers.
- Lifetime ISA – if you’re aged between 18 and 39 at the time of opening the account, the government will add an annual 25% bonus to your savings (up to a maximum of £1,000 per year) until you’re 50. But the property you buy can’t cost more than £450,000, and the money must either be used to buy your first home or left in the account until you’re at least 60 or you’ll pay a penalty fee.
- Right to buy – also known as ‘right to acquire’, this gives tenants who rent from their local council the chance to buy the home they live in at a discount.
- First Homes scheme – available to first-time buyers over 18 years old, this scheme offers new-build homes for 30-50% less than their market value.
- Shared ownership – allows you to buy a share in a property (often 25-75%) and pay rent on the remaining share. There are usually options to increase the proportion you own and eventually buy it outright.
- Mortgage guarantee scheme – offered the chance to get a mortgage with a 5% deposit. The original scheme ended on 30 June 2025, but the government says it will soon replace it with a new, permanent scheme. We'll update this page when we know more.
What our expert says...
“Having a good credit record can help your chances of getting a mortgage. If you don't have much of a record and want to buy a home then it can be worth getting advice from a mortgage broker to see if a lender is likely to accept you or not.
If you have a proven track record of repaying credit and paying bills on time, mortgage providers might be more willing to lend to you. That’s because they might be confident you’ll pay them back. And make sure you’re registered on the electoral roll as lenders like to see proof of your address, which can also help."
- Guy Anker, experts in personal finance, insurance and utilities
Compare first-time buyer mortgages
We compare mortgages from some of the market’s leading financial providers. Search for our best first-time buyer mortgage rates and see what you could afford to borrow for your first home.
Start comparisonIf you prefer to speak to someone about your options, we’ve partnered with L&C Mortgages Ltd** to provide you with fee-free mortgage advice. Get in touch with one of their advisors here.
Go to L&C mortgages
About L&C Mortgages Ltd
**L&C Mortgages Ltd is a multi-award winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, which is authorised and regulated by the Financial Conduct Authority (143002).
L&C is not a part of Compare the Market Limited. Compare the Market receives a % of the commission that our partner L&C earns. All applications are subject to lending and eligibility criteria.
L&C will not charge you a broker fee should you decide to proceed with a mortgage.
Frequently asked questions
What is a guarantor mortgage?
With a guarantor mortgage, a close family member or friend agrees to cover the mortgage repayments if you can’t.
A guarantor must be:
- A homeowner
- Prepared to put their own home at risk if your mortgage repayments aren’t paid.
Guarantor mortgages can be useful if you have little or no deposit, or you’re struggling to find a suitable lender.
What is a joint mortgage?
A joint mortgage is a mortgage you take out with someone else. This could be a:
- Family member
- Friend
- Husband or wife
- Partner.
Both people are responsible for a joint mortgage. That means you’ll both be liable for any missed repayments or making up the balance if one of you is unable to pay.
What is a loan to value (LTV) ratio?
A loan to value (LTV) ratio is the amount you can borrow on a mortgage compared to the overall cost of a property. It’s usually shown as a percentage.
For example:
- You’re buying a property worth £200,000
- You have a £20,000 deposit (10% of the property price)
- You’re taking out a £180,000 mortgage (90% of the property price)
- Your LTV is 90%
Should I buy a freehold or leasehold for my first home?
It’s up to you whether you buy a freehold or leasehold property.
Freehold means you own the property and the land it sits on. If you buy a house, it’ll usually be freehold.
With a leasehold, you:
- Own the property (but not the land it’s on) for the length of the lease agreement
- Typically must pay fees including ground rent and service charges.
Most flats and maisonettes are leasehold.
Read more on the pros and cons in our guide to freehold versus leasehold properties.
What other costs are there to consider when buying a first home?
Costs and fees to consider when buying your first home include:
- Stamp duty – first-time buyers in England and Northern Ireland don’t pay stamp duty on the first £300,000 of properties costing up to £500,000.
- Arrangement fee – this is a fee you pay to take out a mortgage.
- Valuation fee – your mortgage provider will carry out a valuation of the property. Valuation fees vary among providers.
- Survey fees – the cost of surveys varies, depending on the level of detail you want.
- Broker fees – if you go through a mortgage broker, you may need to pay them a fee. We’re partnered with L&C Mortgages Ltd** which provides fee-free advice.
- Legal costs – find out more about the legal expenses relating to a property’s sale in our guide to conveyancing.
What’s the difference between repayment and interest-only mortgages?
With a repayment mortgage:
- You pay back both the capital (the amount you initially borrowed) and the interest each month
- By the time your mortgage ends, you’ll have paid off the total loan.
With an interest-only mortgage:
- You're only paying the interest each month and none of the original capital borrowed
- When the mortgage term ends, you still owe the lender the original loan. Apply for an interest-only mortgage and you’ll need to show how you intend to pay the original capital back.
Interest-only mortgages tend to have strict eligibility criteria so they’re not commonly available to first-time buyers.
Should I consider a longer-term mortgage?
The standard length (or term) of a mortgage is 25 years. But an increasing number of mortgage lenders are offering longer-term mortgages – some up to 35 or even 40 years.
First-time buyers could consider a longer-term mortgage because spreading the cost over a longer period can lower the amount you pay back each month.
When considering a longer-term mortgage, be aware that while your monthly repayments will be lower, you’ll be paying back a lot more in interest overall.
Like this?
Then you'll like these
