First-time buyer mortgage advice

What is a first-time buyer mortgage?

Just like the name suggests, a first-time buyer mortgage is a loan to help you buy your first home. You'll agree to repay it plus interest in monthly payments over several years - usually 25 or more.

If you don't make these payments, your lender has the right to claim your property in return, so it's key to choose a mortgage that's right for you.

Am I a first-time buyer

You're a first-time buyer if:

• You've never owned a home before, either in the UK or abroad
• You plan to live in the property as your main residence

You're not a first-time buyer if:

• You're buying a home with someone such as a partner who already owns or has owned a home
• You've inherited a home before, even if you never lived there
• Someone else - like a parent - is buying a property for you and already owns their own

How to get a first-time buyer mortgage

So, how does a mortgage work for first-time buyers? Getting your first mortgage usually follows these five steps.

As a specialist mortgage broker for first-time buyers, we can help make things as smooth as possible from start to finish - including finding you the best available deals. Arrange a free appointment today and move one step closer to your new home.

1. Check how much you can borrow

Start by working out what size deposit you can put down and how much you can afford to borrow. Our first-time buyer calculators will give you handy estimates.

You can chat with one of our advisors for a more accurate idea of how much mortgage you can get as a first-time buyer. They'll go over things like your income, savings, outgoings and credit history.

2. Get a mortgage in principle

A mortgage agreement in principle is a quote for how much you could hypothetically be able to borrow from a lender. Getting one before starting your property search shows estate agents that you're a serious buyer.

Applying for an agreement in principle only involves a soft credit check, so it won't show up on your credit report. Plus, there's no obligation to go ahead with it.

3. Find a property and make an offer

Here's the fun bit! With your price range in mind, search for homes that meet your needs in the area you want to live in. When you've found one you want to buy, go ahead and make an offer. We can even help you with negotiations.

4. Choose a mortgage provider

If your offer gets accepted, it's time to find which mortgage provider will give you the best deal to buy it. This can be tough and time-consuming to do on your own but our specialist first-time buyer mortgage advisors can do the heavy lifting for you.

We'll get to know you and scan the market to find the best options from hundreds of options, then steer you through the application process.

5. Receive your mortgage offer

Your lender will review your application and order a valuation on your chosen property. If they're happy, you'll receive a formal mortgage offer. We'll help you find a solicitor to handle the legal side of things so that, eventually, all that's left is to move into your new home.

How much of a deposit do I need?

It's common to aim for a deposit of 10% of your chosen property's total value, meaning you'd borrow the remaining 90%.

Here's a quick illustration of how much you'd need to save for different-size deposits on a property worth £285,000, which is around the average UK first-time buyer house price. Remember, though, that house prices vary significantly across the country, especially outside of London.

Deposit percentage	Deposit value
5%	£14,250
10%	£28,500
15%	£42,750

What type of mortgage is best for first-time buyers?

Our first-time buyer mortgage advisors will tell you that there's no one 'best' type - it comes down to what suits you. Options include:

• Fixed rate: These mortgages come with fixed interest rates, meaning your repayments won't change over an agreed period (commonly two to five years). Once the deal ends, you'll move on to your lender's standard variable rate unless you get a new deal.
• Standard or discounted variable rate: Interest is set at your lender's basic rate, which they can choose to change. With a discounted variable rate mortgage, the rate is set below your lender's basic rate for the length of your agreement.
• Tracker rate: The interest rate goes up or down in line with the Bank of England's base rate, typically starting at a certain percentage over it.
• Offset: If you have a savings account and mortgage with the same provider, you could pay less interest on your mortgage instead of earning it on your savings. Fixed and variable offset mortgages are available.
• Interest-only: You only repay interest charges each month, rather than any of the original amount you borrowed. You'll need to have a plan for repaying the full amount when the mortgage term ends, though. This type is rarely offered to first-time buyers as a result.
• Guarantor: A close third party such as a family member guarantees to cover your repayments if you fail to make them. This gives the lender extra security but can put pressure on a loved one and your relationship with them.
• Joint: A mortgage you take out with someone else, such as a partner, friend or family member who's also a first-time buyer, with both people equally responsible for the repayments. You may be able to put down a bigger deposit and access better rates by combining your income and savings.

What schemes are available to help first-time buyers?

There are several government schemes designed to help people like you get on the property ladder, including:

• Lifetime ISA: If you're between 18 and 40, you could save into a Lifetime ISA and have the government top you up by 25% up to £1,000 each year. Valid on properties worth up to £450,000.
• First Homes Scheme: If you're over 18 and earn below £80,000 a year, you could use this scheme to buy a new-build home at 30-50% below its market value.
• Shared ownership: This type of mortgage allows you to buy between a 10% and 75% share in a new-build property and pay rent on the rest. You'll only need a deposit for the share you're buying and can buy more of the home up to 100% over time.
• Mortgage guarantee scheme: Running until June 30th 2025, this scheme encourages lenders to offer 95% mortgages on homes under £600,000, meaning you only need a 5% deposit.

Do first-time buyers pay stamp duty?

It's worth noting you also receive stamp duty relief as a first-time buyer. Stamp duty is a tax that most people have to pay when they buy a new home. The discount for first-time buyers varies by where you live but, in England and Northern Ireland, you won't pay any stamp duty on properties up to £425,000, compared to £250,000 for everyone else.

Why choose Alexander Hall for first-time buyer mortgage advice?

Navigating the property market for the first time is exciting but tricky, with lots of big decisions along the way. Here's why you can rely on our mortgage brokers for first-time buyers like you:

• Impartial advice: We're not biased towards specific mortgage providers, so we'll give you information and options to suit you, not the lenders.
• Good connections: From big to small, we scan the market from over 100 lenders to find you the best deals. Plus, we can speak to the right people to move your application along.
• Easy process: Not sure where to start? We take the hard work and complexity out of the mortgage process, allowing you to get on with your life in the meantime.
• Great service: Don't just take our word for it - over 5,500 people rate us 'Excellent' on Trustpilot, and we promise to deliver the same standards of service to you.
• Award-winning experts: We've earned a host of awards over more than three decades, including the Best Broker for Customer Service in the 2024 Legal & General Mortgage Club Awards.