Buying your first home is one of the biggest financial decisions you will ever make. The process can feel overwhelming, with unfamiliar jargon, complex decisions, and what can seem like endless paperwork. This guide walks you through everything you need to know as a first-time buyer in the UK — from saving for a deposit and understanding how much you can borrow, to government schemes, mortgage types, and the step-by-step buying process.
How Do You Start Buying Your First Home?
Start by getting your finances in order: check your credit score, work out how much deposit you can save, and understand the full costs beyond just the property price. Before you browse property listings, you need a clear picture of how much you can afford, how much you need to save, and what the buying process involves.
The good news is that first-time buyers enjoy several advantages in the UK. You may be eligible for stamp duty relief, government-backed schemes to help you onto the property ladder, and specific mortgage products designed with first-time buyers in mind. Understanding these benefits and how to access them can save you thousands of pounds and make homeownership more achievable than you might think.
The entire process, from making an offer to picking up the keys, typically takes around three to six months. Having a clear plan from the outset will help you navigate each stage with confidence.
How Much Deposit Do You Need?
The deposit is the single biggest upfront cost when buying a home. Most lenders require a minimum deposit of 5% of the purchase price, although having a larger deposit — ideally 10%, 15%, or 20% — will unlock better interest rates and more favourable mortgage terms.
For example, on a property costing £250,000, a 5% deposit would be £12,500, while a 10% deposit would be £25,000. The difference in interest rates between a 90% LTV mortgage and a 95% LTV mortgage can be significant — potentially saving you thousands over the life of the loan.
Moving from a 95% LTV to a 90% LTV mortgage can reduce your interest rate by 0.3–0.5%. On a £225,000 mortgage over 25 years, that could save you £15–25 per month — over £5,000 across the full term.
There are also ways to boost your deposit through family help, gifted deposits, and government-backed savings schemes. For a detailed look at deposit requirements and saving strategies, read our guide on first-time buyer deposits.
How Much Can You Borrow?
How much a lender will offer you depends primarily on your income and outgoings. Most lenders use an income multiple of 4 to 4.5 times your annual gross salary as a starting point, although some may go higher in certain circumstances. For a joint application, both incomes are typically included.
However, income multiples are only the starting point. Lenders also carry out a detailed affordability assessment, which takes into account your monthly outgoings, existing debts, living expenses, and potential future interest rate rises. This means the amount you can actually borrow may be higher or lower than the simple income multiple suggests.
| Factor | Helps borrowing | Reduces borrowing |
|---|---|---|
| Income | High stable salary, overtime, bonuses | Low or irregular income, short employment history |
| Deposit | 10%+ deposit (lower LTV) | 5% deposit (higher LTV) |
| Credit history | Clean record, long credit history | Missed payments, CCJs, defaults |
| Existing debts | No outstanding loans or credit cards | Car finance, student loans, credit card balances |
| Monthly spending | Low fixed outgoings | High childcare, travel, or subscription costs |
Can I borrow more with a joint mortgage?+
Yes. With a joint mortgage, lenders typically combine both applicants' incomes when calculating the income multiple. For example, if you earn £30,000 and your partner earns £25,000, a lender using a 4.5x multiple could offer up to £247,500 — compared to £135,000 on your income alone. Both applicants' credit histories and outgoings are assessed, so any issues on either side can affect the amount offered.
Use our affordability calculator to get an estimate of how much you could borrow, or read our detailed guide on how much first-time buyers can borrow.
What Government Schemes Are Available for First-Time Buyers?
The main government schemes currently available are Shared Ownership, First Homes, the Lifetime ISA, and Right to Buy. While some older schemes like Help to Buy have now closed, these remaining options can significantly reduce the deposit you need or boost your savings:
- Shared Ownership:You buy a share of a property (typically 25–75%) and pay rent on the remainder. This reduces the deposit you need and the size of your mortgage. You can buy additional shares over time through a process called “staircasing.”
- First Homes: A scheme offering new-build homes to first-time buyers at a discount of at least 30% off the market value. The discount is passed on to future buyers, keeping homes affordable in perpetuity.
- Lifetime ISA:A savings account where the government adds a 25% bonus on savings up to £4,000 per year, giving you up to £1,000 free each year towards your deposit. You must be between 18 and 39 to open one, and the property must cost £450,000 or less.
- Right to Buy: If you are a council tenant, you may be able to buy your home at a significant discount.
If you withdraw money from a Lifetime ISA for anything other than buying your first home or retirement after 60, you will face a 25% withdrawal penalty. That means you would get back less than you originally put in — not just lose the government bonus.
First-time buyers pay no stamp duty on properties up to £425,000 — a saving of up to £6,250 compared to home movers.
For a comprehensive look at each scheme and eligibility criteria, read our guide to government schemes for first-time buyers.
How Does the Mortgage Application Process Work?
The mortgage application process has seven main stages, from getting an Agreement in Principle through to collecting your keys, and typically takes three to six months from offer to completion. Understanding each stage in advance will help you feel prepared and avoid unnecessary delays.
- 01
Get an Agreement in Principle (AIP)
A lender confirms how much they are prepared to lend you, subject to full checks. Usually involves a soft credit search and is valid for 60–90 days.
- 02
Find a property and make an offer
House hunt with your AIP in hand so sellers and agents take you seriously. Once your offer is accepted, you move to the formal stage.
- 03
Submit your full mortgage application
Provide detailed financial information — proof of income, bank statements, ID, and property details. The lender runs a full credit check and affordability assessment.
- 04
Valuation and survey
The lender values the property to confirm it is adequate security. Consider commissioning your own homebuyer report or structural survey to flag any issues.
- 05
Receive your formal mortgage offer
The lender issues a binding commitment to lend you the agreed amount on the specified terms. This is the green light to proceed.
- 06
Conveyancing and exchange of contracts
Your solicitor handles searches, contract reviews, and fund transfers. At exchange, both parties are legally committed to the sale.
- 07
Completion — collect your keys
The mortgage funds are released, the purchase completes, and the property is officially yours. Welcome home.
For a detailed walkthrough of each stage, read our guide to the first-time buyer mortgage process.
How Much Stamp Duty Do First-Time Buyers Pay?
First-time buyers in England and Northern Ireland pay no stamp duty on properties up to £300,000, and just 5% on the portion between £300,001 and £500,000 — a relief that can save you thousands of pounds compared to what a home mover would pay. If the property costs more than £500,000, the relief does not apply and standard rates are charged.
For example, on a £350,000 property, a first-time buyer would pay £2,500 in stamp duty (5% on £50,000), compared to £7,500 for a home mover. That is a saving of £5,000.
Scotland and Wales have their own land transaction taxes with different rates and thresholds. Use our stamp duty calculator to find out exactly what you would pay.
What Types of Mortgage Can First-Time Buyers Get?
First-time buyers can choose from fixed rate, tracker, variable rate, and offset mortgages — most opt for a fixed rate because it provides certainty over monthly payments while you adjust to the costs of homeownership. Here is how each type works:
What Is a Fixed Rate Mortgage?
A fixed rate mortgage locks your interest rate for a set period, usually two, three, or five years, so your monthly payments stay exactly the same regardless of what happens in the wider market. Fixed rates are the most popular choice for first-time buyers because they provide certainty and make budgeting easier during a period when managing new costs can feel unfamiliar.
What Is a Tracker Mortgage?
A tracker mortgage has an interest rate that follows the Bank of England base rate by a set margin. For example, a tracker at base rate plus 1% would currently charge you whatever the base rate is, plus 1%. Your payments go up or down as the base rate changes. Tracker mortgages can be cheaper than fixed rates when interest rates are stable or falling, but they carry more risk if rates rise.
What Is a Variable Rate Mortgage?
A variable rate mortgage has an interest rate set by the lender, which can change at their discretion. This includes the standard variable rate (SVR), which is the rate you typically move onto when a fixed or tracker deal ends. SVRs are usually the most expensive option and are generally best avoided for any extended period.
What Is an Offset Mortgage?
An offset mortgage links your savings to your mortgage and uses them to reduce the balance on which interest is charged. For example, if you have a £200,000 mortgage and £20,000 in savings, you only pay interest on £180,000. You do not earn interest on your savings, but the tax-free benefit of offsetting can be particularly valuable for higher-rate taxpayers.
What Are the Best Tips for First-Time Buyers?
The most impactful things you can do are check your credit score early, save as large a deposit as possible, and get an Agreement in Principle before you start house-hunting. Here are the key steps in more detail:
- Check and improve your credit score: Start reviewing your credit report at least six months before you plan to apply. Register on the electoral roll, pay off any small debts, and make sure all your bills are paid on time.
- Save as much deposit as possible: Even a small increase in your deposit percentage can unlock significantly better rates. Use a Lifetime ISA to boost your savings with the government bonus.
- Budget for all costs, not just the deposit:Solicitor fees, survey costs, moving expenses, furniture, and building insurance can add up to several thousand pounds on top of your deposit.
- Get an AIP early: An Agreement in Principle shows estate agents and sellers that you are a serious, credible buyer. It also gives you clarity on your budget.
- Consider using a mortgage broker: A broker can search across the whole market, find deals you might not find on your own, and guide you through the application process. This can be especially valuable for first-time buyers who are unfamiliar with the process.
- Do not overstretch yourself: Just because a lender will offer you a certain amount does not mean you should borrow the maximum. Consider how your payments would change if interest rates rise, and leave room in your budget for unexpected expenses.
- You can buy with as little as 5% deposit, but 10%+ unlocks significantly better rates.
- Most lenders offer 4–4.5x your annual income — a joint application combines both salaries.
- First-time buyers pay zero stamp duty on properties up to £425,000.
- The Lifetime ISA gives you a free 25% government bonus on savings up to £4,000/year.
- Budget for the full cost of buying — solicitor fees, surveys, and moving costs add up quickly.
Whether you are just starting to think about buying or you are ready to apply, a specialist broker can help you navigate the process and find the best deal for your circumstances. Visit our residential mortgages page or use our affordability calculator to get started.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home.