First-Time Buyer Mortgages: Everything You Need to Know

Buying your first home is one of the most significant financial decisions you will ever make — and one of the most confusing. Between deposits, mortgage types, government schemes, surveys, and solicitors, it can feel impossible to know where to start. In this guide, I answer the questions I hear most often from first-time buyers: what you need to save, how much you can borrow, what a Decision in Principle actually is, and what happens from the moment your offer is accepted through to getting your keys.

How much deposit do I need as a first-time buyer?

The minimum deposit most mortgage lenders will accept is 5% of the purchase price. On a £250,000 property, that is £12,500. However, the deposit you put down has a significant impact on the mortgage deals available to you — a concept called the loan-to-value (LTV) ratio.

The lower your LTV, the less risk you represent to the lender, and the more competitive the interest rates you can access. A buyer with a 10% deposit (90% LTV) will typically access better rates than one with 5% (95% LTV). A buyer with 25% (75% LTV) will have access to the most competitive deals of all.

This does not mean you need to wait until you have 25% saved. Thousands of first-time buyers buy successfully with 5–10% deposits every year. But it is worth understanding how your deposit size affects your monthly repayments and total cost — something we work through with every first-time buyer we advise.

How much can I borrow based on my salary?

Most lenders use an income multiple as a starting point — typically 4 to 4.5 times your gross annual income, though some will lend up to 5 or 5.5 times income in certain circumstances. For a joint application, they generally use a combined income multiple.

However, the income multiple is just the starting point. Lenders also run a detailed affordability assessment — looking at your committed expenditure (credit cards, car finance, student loans, subscriptions), your household costs, and whether you could still afford the mortgage if interest rates rose significantly above the current level. This stress test is called the affordability check, and it means two people earning identical salaries can receive very different mortgage offers depending on their outgoings.

Self-employed applicants, those on variable or commission-based income, contractors, and those with complex income structures may find the process more involved — lenders assess these applications differently, and working with a broker who understands how to present your income accurately to the right lender is particularly valuable.

The best way to know your real borrowing figure is to have a proper conversation with a mortgage adviser rather than relying on online calculators. The calculators give you a broad sense of scale, but they do not factor in your actual financial picture.

What is a Decision in Principle, and do I actually need one?

A Decision in Principle (DIP) — also called an Agreement in Principle (AIP) or Mortgage in Principle — is a written indication from a lender that they would, in principle, be prepared to lend you a specified amount. It involves a basic credit check and income assessment, but it is not a full mortgage application and does not guarantee you will be approved.

Yes, you need one. Most estate agents will not accept an offer on a property without one. It shows sellers and estate agents that you are a credible, financially prepared buyer rather than a time-waster. In competitive markets — particularly for desirable properties in the North West — having your DIP ready to present with an offer can genuinely make the difference.

It is worth noting that some lenders conduct a hard credit search for a DIP (which leaves a footprint on your credit file) while others use a soft search (which does not). We always aim to use soft search DIPs wherever possible, to protect your credit score during the searching and offering stage.

What government schemes are available to first-time buyers?

Several government-backed schemes exist specifically to help first-time buyers get onto the ladder. The landscape changes periodically, so it is always worth checking which are currently active — but here is an overview of the key schemes as of 2026:

Shared Ownership

Shared Ownership lets you buy a share of a new-build or resale property — typically between 10% and 75% — and pay rent on the remaining share (which is owned by a housing association). Over time, you can buy additional shares in a process called staircasing, until you own the property outright. The advantage is a significantly smaller deposit requirement (based on the share you are buying, not the full property value). The trade-off is that you will be paying both a mortgage and rent simultaneously, and there are restrictions on selling.

Lifetime ISA (LISA)

The Lifetime ISA allows you to save up to £4,000 per year, with the government adding a 25% bonus — up to £1,000 per year. Funds can be used towards a first home purchase (on properties up to £450,000) or for retirement from age 60. The LISA must have been open for at least 12 months before you use it for a property purchase. If you have one, the bonus can make a meaningful difference to your deposit — a couple each with a maxed-out LISA could accumulate over £30,000 in total government bonuses over several years.

First Homes Scheme

First Homes is a scheme that offers new-build homes to first-time buyers at a discount of at least 30% below market value. Local authorities can apply higher discounts for key workers or local buyers. The discount carries over when you sell, meaning the property remains affordable for future first-time buyers. Availability depends on whether your local area has participating developments.

Not every scheme suits every buyer. We always review your circumstances and advise on which, if any, of the available schemes work in your favour — sometimes the open market with a straightforward mortgage is the better route.

Repayment mortgage vs interest-only: what is the difference?

With a repayment mortgage, each monthly payment covers both the interest charged and a portion of the capital you borrowed. At the end of the term, the mortgage is fully paid off and you own the property outright. This is by far the most common mortgage type for residential buyers.

With an interest-only mortgage, your monthly payments cover only the interest — the capital balance stays the same throughout the term. At the end, you need a separate plan (called a repayment vehicle) to repay the full original loan. Interest-only mortgages are now very rarely available to residential buyers without significant equity or assets. They remain common in the buy-to-let market.

For first-time buyers, repayment is almost always the right choice — you are building equity in the property with every payment, and you will own it outright at the end of your term.

How does stamp duty work for first-time buyers?

Stamp Duty Land Tax (SDLT) thresholds change periodically, so always check the current rates at GOV.UK before budgeting. As of 2026, first-time buyers benefit from stamp duty relief on properties up to a certain value — this threshold has varied over time. For purchases above the relief threshold, stamp duty applies on the portion above it at the standard rates.

The key practical point: stamp duty is an upfront cost paid on completion, not added to your mortgage. It needs to be budgeted for separately from your deposit. Your solicitor will calculate the exact amount due for your specific purchase and advise you accordingly.

What credit score do I need to get a mortgage?

There is no universal minimum credit score required for a mortgage, because different lenders use different credit reference agencies and have different internal scoring models. What matters is not a specific number but the overall picture your credit history presents.

Lenders look at: payment history (missed or late payments); the level of existing debt relative to available credit; how long your credit history is; the number of recent credit applications (hard searches); and whether you have any county court judgements (CCJs), defaults, IVAs, or bankruptcy on record.

Before applying, it is worth checking your credit reports across all three main agencies — Experian, Equifax, and TransUnion. Errors on credit files are more common than most people realise, and correcting them before applying can make a significant difference. We review credit files with clients as part of our initial consultation.

How long does the mortgage and buying process take?

The process from having an offer accepted to completing a purchase typically takes 8 to 16 weeks, though it can be faster for straightforward transactions or slower for long chains. Here is a rough breakdown:

• Mortgage application to offer: 2–4 weeks, depending on the lender and the complexity of your application
• Survey and valuation: usually instructed by the lender as part of the application; typically completed within 1–2 weeks of instruction
• Legal conveyancing: the biggest variable; 6–12 weeks is common, but chains and complex titles can extend this significantly
• Exchange to completion: usually 1–4 weeks after exchange of contracts

The practical implication: do not book time off work, give notice on your rental, or make other arrangements based on an optimistic timeline. Keep in close contact with your solicitor and be ready to act quickly when they need information from you — delays from buyers are one of the most common causes of extended timelines.

Can I get a mortgage on my own with one income?

Absolutely. Solo mortgage applications are very common and are assessed on exactly the same criteria as joint applications — income, outgoings, deposit, and credit history. The main practical difference is that with one income, the maximum you can borrow will typically be lower than a joint application, which affects the price range of property you can access.

There are options that can help solo buyers access higher loan amounts, including joint borrower sole proprietor mortgages (where a parent or other family member is on the mortgage for affordability purposes but not on the title deeds). This is a specialist area and worth discussing if you feel your solo income is limiting your options.

What other costs do I need to budget for besides the deposit?

The deposit gets most of the attention, but there are several other costs first-time buyers need to budget for:

• Stamp Duty Land Tax — depends on purchase price and applicable relief (see above)
• Solicitor / conveyancer fees — typically £1,000–£2,000 plus disbursements (searches, land registry fees)
• Survey — ranges from a basic mortgage valuation (often included by the lender) to a full structural survey; a HomeBuyer Report typically costs £400–£700; a full Building Survey £600–£1,500 depending on property size
• Mortgage arrangement fee — some mortgage products carry an arrangement fee; others are fee-free. We always compare the total cost including fees, not just the headline rate
• Removal costs — often overlooked until it is too late to budget properly
• Buildings and contents insurance — lenders require buildings insurance to be in place from exchange of contracts, not just completion

As a rough guide, budget an additional 2–3% of the purchase price for these costs on top of your deposit.