First-time buyer mortgage guide

Buying your first home is exciting—but the mortgage process can feel unfamiliar. This guide explains how first-time buyer mortgages typically work in the UK, what you’ll need to plan for, and what happens between making an offer and getting the keys.

What is a first-time buyer mortgage?

A first-time buyer mortgage is a mortgage taken out by someone who is buying a property for the first time. There isn’t one single universal definition across every lender and scheme, so the practical point is to check how “first-time buyer” is defined for the product or support you’re considering.

In many cases, first-time buyers are attractive to sellers because they often aren’t selling a previous home at the same time—however, your mortgage affordability and the property itself still have to meet lender requirements.

How lenders assess a first-time buyer

Before a lender will offer a mortgage, they’ll look at both you and the property.

What lenders typically consider about you

• Income and employment: stability, type of income, and whether it appears sustainable.
• Your outgoings: existing commitments such as loans, credit cards, and other regular payments.
• Credit history: how you’ve managed credit in the past.
• Affordability: whether the mortgage payments fit your budget under the lender’s stress-testing approach.

What lenders typically consider about the property

• Valuation: the lender’s valuation needs to support the purchase price.
• Condition and risk: property type, age, and any factors that could affect long-term value.
• Mortgage-to-value (LTV): how much you’re borrowing compared with the purchase price.

Mortgage types you’re likely to see as a first-time buyer

Different mortgage structures can suit different priorities—such as budgeting certainty, flexibility, or minimising risk.

Fixed-rate mortgages

With a fixed-rate mortgage, your interest rate is set for an agreed period (often a number of years). This can help with monthly budgeting because the rate doesn’t change during the fixed term.

Variable-rate mortgages

A variable-rate mortgage can change over time, depending on the lender’s rate structure. This means your payments may rise or fall.

Tracker mortgages

A tracker mortgage is linked to a reference rate. When the reference rate moves, the mortgage rate can move too.

Interest-only mortgages (less common for first-time buyers)

An interest-only mortgage means you pay only the interest each month, with the plan to repay the capital at the end of the term. This requires a credible repayment strategy.

Deposit and LTV: the starting point for your options

Two of the biggest factors shaping what you can borrow are your deposit and your LTV.

• LTV (loan-to-value) compares the loan amount to the property value.
• A larger deposit generally means a lower LTV, which can broaden the range of mortgage options available.

Even if you’re aiming for a smaller deposit, it’s still important to understand how LTV affects affordability checks and the overall cost of borrowing.

Planning for the wider costs

Your deposit is only part of the picture. First-time buyers also need to budget for items such as:

• legal and conveyancing costs
• survey costs
• moving costs
• buildings insurance (typically required by lenders)
• potential ongoing costs like service charges (for some flats)

Stamp duty and first-time buyer considerations

Stamp Duty Land Tax (SDLT) applies to property purchases in England and Northern Ireland. In Scotland and Wales, the taxes are structured differently.

First-time buyers may be eligible for stamp duty relief, but the rules depend on factors such as the purchase price and whether you meet the relevant conditions. Because the details can be specific, it’s worth checking the current rules for your location and purchase.

For official guidance, see: https://www.gov.uk/stamp-duty-land-tax

Mortgage in principle (agreement in principle)

A mortgage in principle (sometimes called an agreement in principle) is an indication from a lender of how much they may be willing to lend based on information you provide.

It can be useful because it:

• helps you understand a realistic budget
• supports your position when making an offer
• can make the process smoother once you find a property

It’s important to remember that an agreement in principle is not the same as a final mortgage offer. The final decision depends on the full application details and the property valuation.

Step-by-step: the first-time buyer mortgage journey

1) Get clear on affordability

Before you start viewing seriously, work out what monthly payments you can comfortably manage. Lenders will also assess affordability using their own criteria.

2) Consider your deposit strategy and LTV

Decide how much you can put down and what LTV that creates. This can influence the mortgage types and options that are realistically available.

3) Obtain a mortgage in principle

Use this stage to confirm your likely borrowing range and strengthen your offer position.

4) Find a property that fits both your budget and the lender’s requirements

When you view properties, think beyond the asking price. Lenders may value the property differently to the purchase price, which can affect the mortgage amount available.

Also consider ongoing costs such as service charges (for leasehold properties) and any ground rent arrangements where applicable.

5) Make an offer and align it with your mortgage plan

Once your offer is accepted, the mortgage process moves from planning to formal assessment.

6) Submit the formal mortgage application

At this stage, you’ll provide more detailed information and documentation. The lender will also arrange a valuation.

7) Arrange surveys

A survey helps identify potential issues with the property’s condition. The type of survey can vary depending on the property and your preferences.

If concerns arise, it may affect your next steps—such as requesting further information or reconsidering the purchase.

8) Conveyancing and legal work

Conveyancing is the legal process of transferring ownership. Your solicitor or conveyancer will manage searches, review contract details, and coordinate with the seller’s legal team.

9) Buildings insurance before completion

Lenders typically require buildings insurance from an appropriate point in the process, often before completion.

10) Exchange contracts and complete

• Exchange is when contracts become legally binding.
• Completion is when the remaining funds are transferred and you receive the keys.

Schemes that can help some first-time buyers

Depending on where you’re buying and your circumstances, there may be government-backed or shared-ownership style options that can make the first step more achievable.

Mortgage Guarantee Scheme (deposit support)

The Mortgage Guarantee Scheme is designed to encourage lenders to offer mortgages with smaller deposits for eligible borrowers.

Eligibility and the exact structure of the mortgage can vary, so it’s important to check the current scheme rules and whether the property type and purchase price fall within the scheme parameters.

For official guidance, see: https://www.gov.uk/government/publications/the-mortgage-guarantee-scheme

Shared Ownership

Shared Ownership can allow you to buy a share of a property and pay rent on the remainder. The rules and qualifying criteria can vary by nation and local authority.

For official guidance, see: https://www.gov.uk/affordable-home-ownership-schemes/shared-ownership-scheme

First Homes

The First Homes Scheme can offer eligible buyers a discount on the market value of certain homes (often new builds), subject to local price and income limits and other conditions.

For official guidance, see: https://www.gov.uk/first-homes-scheme

Key takeaways

• Your deposit and LTV are central to the mortgage options available.
• Lenders assess both affordability and the property valuation.
• A mortgage in principle can help you plan, but it isn’t the final decision.
• Stamp duty relief may apply, but rules depend on purchase price and location.
• The journey doesn’t end at the mortgage application—surveys, conveyancing, insurance, exchange and completion all matter.

If you’re preparing to buy, understanding each stage in advance can make the process feel more manageable and help you plan your finances with confidence.