Your home may be repossessed if you do not keep up repayments on your mortgage. The value of property can fall as well as rise. You may get back less than you invest.
Quick answer
First-time buyers in the UK need at least a 5% deposit to access mortgage products, though a 10% or larger deposit opens significantly better deals. Lenders assess affordability in detail - income multiples are a guide only. Government schemes such as the Mortgage Guarantee Scheme can help with smaller deposits. Most first-time buyers benefit from working with an FCA-authorised mortgage broker before approaching lenders directly.
Mortgage advice note: Mortgages are complex regulated products. This page provides general information only. For personalised advice, speak to an FCA-authorised mortgage adviser who can assess your individual circumstances.
The Buying Process Overview
- Get a Decision in Principle (DIP) - an initial indication of what a lender might offer, based on a soft or light assessment. Not a guarantee, but useful for estate agents.
- Find a property and make an offer
- Make a formal mortgage application - full credit search and underwriting
- Property valuation and survey - the lender values the property; you may also want an independent survey
- Mortgage offer issued
- Conveyancing - solicitors exchange contracts and complete the legal transfer
- Completion - you receive the keys
Saving for a Deposit
A Lifetime ISA (LISA) allows first-time buyers to save up to £4,000 per year with a 25% government bonus on contributions, up to a maximum bonus of £1,000 per year. Withdrawals for a first property purchase (under the scheme limit) are tax-free. There are conditions and withdrawal penalties if you use the money for something other than a home purchase or retirement - confirm the rules at the time you open one.
Costs Beyond the Deposit
Budget for: Stamp Duty (see FAQ below), solicitor/conveyancer fees (£1,000-£2,500 typically), mortgage arrangement fees (if not added to the loan), survey costs, and removal expenses. It is common for first-time buyers to underestimate these additional costs.
Frequently Asked Questions
The minimum deposit for most residential mortgages in the UK is 5% of the purchase price (a 95% loan-to-value mortgage). These are available but typically carry higher interest rates. A deposit of 10% or more gives access to a significantly wider range of mortgage products at better rates. If you can reach 15% or 25%, rates improve further. The larger your deposit relative to the purchase price, the lower your loan-to-value (LTV) ratio and the better the mortgage terms available.
The UK government's Mortgage Guarantee Scheme allows lenders to offer 95% LTV mortgages to buyers of homes up to a certain value, with the government providing a guarantee to the lender (not to you as the borrower) on the portion above 80% LTV. This increases lender willingness to offer high-LTV deals. Check the current eligibility criteria and scheme status on the government's website, as these schemes are periodically reviewed and updated.
Mortgage lenders typically use an income multiple as a starting point - commonly 4 to 4.5 times your gross annual income, though some lenders extend to 5 or 5.5 times income for higher earners or professionals in certain categories. Lenders also carry out a full affordability assessment, reviewing your regular outgoings, committed expenditure, and the impact of potential rate rises. The income multiple is a guide, not a guarantee.
For most first-time buyers, using a whole-of-market mortgage broker is strongly advisable. They have access to deals not available on the high street, can advise on which lenders are most likely to accept your application given your specific profile, and can handle the application process on your behalf. UK mortgage advisers must be FCA-authorised. Brokers may charge a fee or earn commission from lenders - ask upfront how they are paid.
Stamp Duty Land Tax (SDLT) is a tax paid on property purchases in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax (LBTT) and Wales has Land Transaction Tax (LTT). First-time buyers in England benefit from a relief: no SDLT on the first £425,000 of a property's purchase price, with SDLT at 5% on the portion between £425,001 and £625,000. Properties above £625,000 do not benefit from the first-time buyer relief. These thresholds should be confirmed on the government's website as they are subject to change.
Disclosure
Fundslender is a UK borrowing information and guidance website. We do not lend money directly. When you use this site, you may be connected with regulated lenders or brokers. We may receive a fee or commission if you proceed with a product found through our site. This does not affect our editorial independence or the information we provide. Rates, terms, and approval decisions are set by each individual lender and will vary based on your personal circumstances. Approval is not guaranteed. All borrowing involves risk. Always compare your options, read the full terms, and seek independent regulated financial advice if you are unsure whether a product is right for you. How we make money · Editorial policy