First-time buyer
Your first mortgage, without the parts nobody explains.
You need less deposit than you think and more paperwork than you hope. Here is the whole picture: what you can borrow, what it costs on the day, and the five things that make a lender say no to somebody who could easily afford it.
How much deposit do you actually need?
Five percent is the honest floor with most high-street lenders. On a £250,000 flat that is £12,500. It is achievable, and there is nothing wrong with it - but understand what it costs you, because the deposit does not just decide whether you can buy. It decides the rate you get for the next five years.
Lenders price in loan-to-value bands. Crossing a band is worth more than any amount of haggling:
| Deposit | Loan to value | Rate tier | What changes |
|---|---|---|---|
| £12,500 | 95% | Highest | Fewest lenders, strictest criteria, priciest rates |
| £25,000 | 90% | High | The whole high street opens up |
| £37,500 | 85% | Middle | A noticeable drop in rate for very little extra saving |
| £62,500 | 75% | Low | Close to the best rates on the market |
| £100,000 | 60% | Lowest | The headline rates you see advertised |
The move worth making
If you are sitting at 91% loan to value, saving another one percent of the purchase price often pays for itself several times over across a five-year fix. We will tell you when you are close to a band, and when you are not - because waiting when you are nowhere near one is just a year of rent.
Where the deposit is allowed to come from
Lenders and solicitors both have to satisfy anti-money-laundering rules, so the source of your deposit matters as much as the amount. What is normally fine:
- Your own savings. Expect to show six months of statements for the account it sits in.
- A gift from close family. Almost always accepted, but it must genuinely be a gift. The giver signs a letter confirming they keep no interest in the property and want nothing back. A loan from a parent is a completely different thing and must be declared.
- A Lifetime ISA. The government adds 25% to what you pay in, up to £1,000 a year. The account must have been open at least 12 months and the property must cost £450,000 or less. Withdraw it for anything else before 60 and you pay a 25% penalty, which takes back more than the bonus.
- Equity from a divorce settlement, inheritance or a share sale. Fine, with the paperwork that proves it.
What causes real trouble: cash paid in over time with no trail, money that arrived from overseas without documentation, and a deposit that appeared in your account last week from a source you would rather not explain. Tell us early. There is almost always a way to evidence it, but not the day before exchange.
If the deposit is the problem, not the income
- Guarantor and joint borrower sole proprietor. A parent's income helps you borrow more without them going on the deeds - which keeps their stamp duty position clean and keeps you a first-time buyer.
- Family deposit and offset products. A relative locks savings with the lender for a few years instead of giving the money away. They get it back, with interest, and you get a lower loan to value.
- Shared ownership. Buy 25% to 75% of a housing association property and rent the rest. Much smaller deposit needed, and you can staircase up later. Read the lease and the service charge very carefully first.
- Track-record lending. A small number of lenders will consider borrowers with no deposit at all where you can prove several years of paying rent on time. Criteria are tight and the rate is higher, but for renters who cannot save while paying somebody else's mortgage, it exists.
What it costs on the day, beyond the deposit
| Cost | Usual range | Notes |
|---|---|---|
| Stamp duty | £0 | Nothing to pay up to £300,000 as a first-time buyer, then 5% on the slice to £500,000. No relief at all above £500,000. |
| Solicitor or conveyancer | £1,200 - £2,000 | Including searches and Land Registry fees. Get a firm on your lender's panel. |
| Survey | £400 - £1,500 | The lender's valuation is for the lender, not for you. On anything older than 1950, pay for a proper survey. |
| Lender product fee | £0 - £1,499 | Often addable to the loan, but you then pay interest on it for the whole term. |
| Broker fee | Case by case | Confirmed in writing before you commit to anything. We are also paid a commission by the lender, which we disclose. |
| Moving and setup | £500 - £1,500 | Removals, a bed that fits, and the fact that curtains cost money. |
Stamp duty figures are England and Northern Ireland for 2026/27. Scotland charges LBTT and Wales charges LTT on different bands. Work out yours.
Avoidable declines
Five things that sink a first application
None of these are about whether you can afford the house. All of them are about what your last three to six months of bank statements say about you.
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Gambling on your statements
Occasional small bets are usually survivable. Regular betting, or anything that looks like chasing losses, is one of the fastest routes to a decline - and underwriters read every line. Stop six months before you apply.
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Living in your overdraft
Going into an arranged overdraft every month before payday tells a lender you have no margin. Get out of it and stay out of it for three months before applying.
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New credit taken out during the process
A car on finance, a sofa on buy now pay later, or a new credit card between your agreement in principle and completion can shrink what you can borrow enough to collapse the purchase. Buy nothing on credit until the keys are in your hand.
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Not being on the electoral roll
It is free, it takes five minutes, and lenders use it to verify you live where you say you do. An unregistered applicant looks harder to place than they are.
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Applying everywhere at once
Every full application leaves a hard search on your credit file. Several in a short window looks like desperation and will start costing you approvals. Pick the right lender first, then apply once.
Questions we get every week
First-time buyer questions
Am I still a first-time buyer if my partner owned before?
For stamp duty relief, no. Every buyer named on the purchase must be a first-time buyer, anywhere in the world, for the relief to apply. Some lenders take a more relaxed view for their own first-time-buyer products, but HMRC does not. It is worth modelling both ways before you decide whose name goes on the deeds.
How long does an agreement in principle last?
Usually 60 to 90 days, and it can normally be refreshed. Get one before you start viewing seriously. Estate agents treat an offer backed by an agreement in principle very differently from one that is not, and in a competitive situation it is often what wins the property.
Should I use a Lifetime ISA or a normal savings account?
If you are certain you are buying a first home under £450,000 within a few years, the Lifetime ISA is very hard to beat - a 25% government bonus on up to £4,000 a year is free money. The catch is the 25% withdrawal penalty if you use it for anything else before 60, which takes back slightly more than the bonus gave you. Open one early even if you only put a pound in, because the 12-month clock starts from the first payment.
Do I need a survey if the lender is doing a valuation?
Yes. The lender's valuation answers one question: is this property worth enough to secure our loan. It is not looking after you, it does not check the roof, and you often never see the full report. On anything with age, an extension, or a flat roof, a proper survey has saved our clients far more than it has ever cost them.
Can I borrow more than 4.5 times my income?
Sometimes. Several lenders will stretch to 5x or 5.5x where income is above a threshold, the loan to value is lower, or you are in a profession they lend generously to - doctors, dentists, solicitors, accountants, teachers and a few others get specific treatment. It is not a lever to pull casually, but it is a real one, and knowing which lender applies it to your job is exactly the sort of thing a broker is for.
Start here
Find out what you can actually buy.
Tell us your income, your deposit and roughly where you are looking. We will come back with a realistic budget, the likely rate tier and what to fix before you apply.
- The first conversation is free
- No credit check, no hard search
- A reply within one working day
Prefer to talk now? Call 0333 339 7301 or email [email protected].