A simples guide

First time buyer mortgages guide

Let’s start with a simple truth. There are thousands of mortgages on the market. Different providers offer different rates, and many mortgages are targeted to a specific type of buyer. For your first step on to the property ladder, you may be interested in looking at mortgages for first-time buyers. Luckily, we’ve made this guide, which should help to clear any confusion regarding first-time buyer mortgages.

What is a first-time buyer mortgage?

In theory, any mortgage can be a first-time buyer mortgage. However, many providers offer deals that are tailored to first-time buyers specifically, which include various incentives and bonuses for customers that take out their first mortgage. In this article, when we refer to a mortgage for first-time buyers, we mean those mortgages with incentives specifically designed for first-time buyers.

When looking for a first-time buyer mortgage, many people opt for a fixed rate term. This often allows them to budget their money better, as the repayments stay exactly the same each month for a predetermined term. Changes in interest rates have no effect on the monthly repayments, and this stability can help first-time buyers to settle into their mortgage payments.

house and piggy bank

How much could I borrow on a first-time buyer mortgage?

As with any mortgage, the amount that you can borrow varies depending on a number of factors. When you apply for a mortgage for first-time buyers, the provider that you approach will assess how much you may borrow depending on a few different variables. These include:

- Your credit score and history

- Your income and outgoings

- Your deposit

- The potential impact of future interest rate changes

These factors won’t only decide how much you can borrow, but they will also be used by the bank and building society to decide whether they want to lend to you. If you are accepted, you will then be offered an Agreement in Principal (otherwise known as a Mortgage Promise).


What deals are available for first-time buyers?

Again, there are no hard and fast rules as to what is available when you’re searching for a first time buyer mortgage. Generally, you need a deposit of at least 5% to be accepted for a mortgage and a deposit of 40% or more will get you the best rates possible.

As with any mortgage, the larger the deposit you make, the lower your interest rate will be which could help reduce your monthly payments. While the actual figures may change from lender to lender, a broadly accepted guideline looks quite similar to this:

- A 5% deposit is the minimum amount required to get a mortgage

- A 25% deposit will get you a good rate

- A deposit of 40% or more will ensure that you get the best rates available

With that in mind, there’s a fairly simple conclusion to be drawn. The more money that you can save to be put forward as a deposit (also known as equity), the higher your chance at getting a better interest rate will be.

Of course, paying a higher deposit may seem daunting at first. However, a combination of better interest rates and a shorter repayment term could mean that saving a little extra may go a long way when it comes to getting a mortgage for first time buyers!

Where can I find the best first time buyer mortgage deals?

You can search for the best value first time mortgage rates on our website, where our simple to use comparison service will show you first time buyer mortgages that suit your needs. We’ll help you find the best deals, so you can move one step closer to the first rung of the property ladder!

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