Compare First-Time Buyer Mortgages
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About First Time Buyer Mortgages
First-time buyer mortgages are for borrowers who have never owned a property before. Use our mortgage comparison tool to compare first-time buyer mortgage rates and deals.
Think carefully about securing debt against your home. Your home may be repossessed if you do not keep up repayments on your mortgage
What is a first-time buyer mortgage?
A first-time buyer mortgage is for buyers who have never owned property. Mortgages for first-time buyers tend to come with a lower deposit of 5% to 10%. Many mortgage lenders offer first-time buyers 90% loan-to-value (LTV) home loans or even 95% mortgages, though these can be harder to find. Some mortgage providers also offer rewards and incentives, such as cashback, to make their deals more attractive.
Am I eligible for a first-time buyer mortgage?
To qualify for most first-time buyer mortgages you must never have owned property in the past. Most lenders also require a mortgage deposit of at least 5% of the property value. In addition, each lender will have other eligibility criteria that you’ll need to meet to get a first-time buyer mortgage – for example, minimum and maximum age requirements and loan terms.
How do I get a mortgage as a first-time buyer?
To apply for a mortgage as a first-time buyer you'll need to supply your lender with documents, such as your passport as proof of ID, and recent utility bills as proof of address. You will also need to provide evidence of your deposit savings, payslips, bank statements and tax documents to show proof of income and savings.
How much deposit will I need to save as a first-time buyer?
You’ll usually need to save a deposit of at least 5% to 10% to get a first-time buyer mortgage.
What is a Help to Buy mortgage, and can I get one?
A Help to Buy mortgage lets borrowers purchase a property with a deposit of 5%. Using the Help to Buy equity loan scheme, buyers can put down a 5% deposit and borrow 20% (up to 40% in London) from the government. This allows them to access 75% LTV mortgages (up to 55% in London) to buy a new-build home worth up to a certain value, depending on the region where the property is located. This ranges from £186,100 in the North East to £600,000 in London.
In England, you could get a Help to Buy mortgage if you are a first-time buyer. In Wales you don’t need to be a first-time buyer to use the scheme, but buyers who are purchasing an additional home are not eligible. Regardless of location, buy-to-let properties are not eligible.
The Help to Buy loan scheme is no longer available in Scotland or Northern Ireland. Help to Buy in England is currently due to end on 31 March 2023, with the last date for applications for the scheme set at 31 October 2022.
» MORE: The pros and cons of Help to Buy
What is the best mortgage rate for a first-time buyer?
As with standard mortgages, rates for first-time buyer mortgages vary. Comparing deals from different lenders can help you find a first-time buyer mortgage to suit you.
How do I apply for a mortgage as a first-time buyer?
You can apply for a first-time buyer mortgage in person or over the phone. The mortgage application process can vary between lenders, but most ask for the following documents when you apply for a mortgage:
- Proof of ID: Legal documents, such as a current passport or a full UK driving licence photocard, to verify who you are.
- Proof of income: Bank statements, payslips, tax statements or proof of benefits or maintenance payments to show evidence of your income as well as your outgoings.
- Proof of deposit: Evidence of your mortgage deposit, for example, savings account statements. If you use a gifted deposit, you may need to fill out a form or request a letter from the person giving you the lump sum.
- Household bills: You may need to provide utility bills or council tax bills as proof of address and to carry out money-laundering checks.
As part of your application, most mortgage lenders will also run a hard credit search to see whether you have a good track record of paying off debt, and they will also carry out stringent affordability checks on your finances
First-Time Buyer Mortgages FAQ
What is a first-time buyer mortgage?
A first-time buyer mortgage is a home loan specifically for buyers who have never owned a property.
Can I get a 95% LTV (5% deposit) mortgage as a first-time buyer?
Yes, some lenders offer 95% LTV mortgages for first-time buyers.
Is Help to Buy only for first-time buyers?
If you are based in Wales, the Help to Buy scheme is available for first-time buyers and existing homeowners who want to purchase a new-build home. However, the scheme is only available to people buying their first home in England. Regardless of location, it is not available for buyers hoping to purchase an additional home or a buy-to-let property.
Can you borrow more on a Help to Buy mortgage?
You may be able to remortgage and borrow more on a Help to Buy mortgage for one of the following reasons: to pay back part or all of your equity loan to make government-approved structural changes to the property to transfer ownership of the property. Before you can remortgage, you will need to apply for permission from the government,
Do all lenders offer Help to Buy mortgages?
No, some lenders don’t offer Help to Buy mortgages, so it’s important to check if a provider is participating in the scheme.
Are rates on Help to Buy mortgages higher?
Similarly to standard mortgages, Help to Buy mortgage rates vary depending on the lender. Therefore, it’s important to research what rates you may be offered using a Help to Buy mortgage before applying to ensure that you can afford the repayments.
Are first-time buyer mortgages more expensive?
Not necessarily. The rate you'll pay will depend largely on how much of a deposit you have and your credit history. Generally, the bigger the deposit you can put down, the lower your interest rate may be.
What kind of deposit do I need for a first-time buyer mortgage?
Most lenders require a deposit of at least 5% to 10% for a first-time buyer mortgage. However, saving up a larger deposit of 15% or more could help you access lower interest rates.
What fees will I pay?
The fees you pay on a mortgage will vary depending on the lender. Common mortgage fees to look out for include arrangement fees, product fees, valuation fees and legal fees.
Will I have to pay stamp duty as a first-time buyer?
First-time buyers in England and Northern Ireland only pay stamp duty on properties costing over £425,000. So you might not have to pay any stamp duty if the property you are buying costs less than £425,000 and you and anyone you are buying a house with are first-time buyers.
A rate of 5% is payable on any portion of the value of the property you’re buying that sits between £425,001 and £625,000. And if the property costs over £625,000, you won’t qualify for any first-time buyer stamp duty relief.
The tax is different if the property is in Scotland or Wales. In Scotland, stamp duty has been replaced by Land and Buildings Transaction Tax, with a nil-rate band for first-time buyers for properties up to £175,000.
In Wales, this tax is known as Land Transaction Tax, with no tax to pay for properties worth less than £180,000 whether you are a first-time buyer or a home mover.
What criteria will I have to meet to get a first-time buyer mortgage?
Each lender has its own criteria that you’ll need to meet to qualify for a first-time buyer mortgage, for example, meeting the age requirements and having a good credit score. Lenders must also run checks to assess whether you can comfortably afford your mortgage repayments.
What are the benefits of first-time buyer mortgages?
First-time buyer mortgages tend to feature incentives, such as money towards legal fees, cashback or lower product fees.
What are the downsides?
As with all mortgages, some first-time buyer home loans come with additional fees such as a product fee. So it’s important to find out the full cost of a mortgage before applying to avoid any unexpected additional expenses.
How can I improve my chances of getting a first-time buyer mortgage?
You can improve your chances of getting a first-time buyer mortgage by working out how much you can afford to borrow. Using a mortgage calculator can give you an idea of the size of loan you can afford based on your income.
Saving up a larger deposit can also boost your chances of getting a first-time buyer mortgage and could help you access better deals. Checking your credit score can give you an idea of the types of mortgage deals you may be eligible for and whether it’s worth improving your credit history before applying.
What types of mortgages are available for first-time buyers?
There are different types of mortgages available for first-time buyers including fixed-rate mortgages, tracker mortgages and standard variable rate mortgages.
How can I compare first-time buyer mortgages?
You can compare first-time buyer mortgages using our mortgage comparison tool, which allows you to sort products by fees, rates and overall cost.
Is there any help available to first-time buyers?
Government schemes such as Help to Buy or Shared Ownership could help first-time buyers finance their first home. Mortgage brokers also offer guidance on the house-buying process and the types of mortgages you may be eligible for based on your financial circumstances.
» COMPARE: Shared ownership mortgages
What are the alternatives for a first-time buyer looking to get on the property ladder?
If you can’t raise a deposit for a first-time buyer mortgage, it may be worth considering a 100% mortgage. This type of home loan doesn't require a deposit but you’ll need a family member or close friend to act as a guarantor for the loan repayments and be able to provide some form of security to offset the missing deposit.
Brean is a personal finance writer at NerdWallet. She covers a range of financial topics and has written for consumer titles including Which?, Moneywise and The Motley Fool. Read more
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