First-time buyer mortgages

Last reviewed by John Fraser-Tucker on 1st April 2025

What is a first time buyer?

To be considered a first-time buyer for UK mortgage purposes, none of the applicants can have owned a home anywhere in the world before, even if they didn’t buy it themselves. 

This means that if you’ve been bought a home, or left one in a will, you don’t qualify as a first-time buyer. 

Oddly enough, it doesn’t make too much difference to the mortgage you’ll get, as most products are available to all buyers. Where it will count, especially in England, Northern Ireland and Scotland, is with your stamp duty charges.

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

Usually at least 5% of the property value, but it’s better to provide more if you can.  

The amount of deposit you provide determines the loan to value (LTV) of your loan. The LTV is the percentage of a property’s value that you borrow - and this is important as the LTV impacts the interest rates a lender can offer.

You'll usually need at least 5% as most lenders offer mortgage loans at a maximum of 95% LTV, although there are a few no-deposit mortgage options available in certain circumstances.

How to get the best first time buyer mortgage rates

Interest rates are generally higher, the higher the LTV of your loan, as higher LTV loans are more risky for the lender. The best thing to do is save as much as you can. Sometimes an increase of just 1% can take you into a new LTV bracket and get you a better deal. 

But with thousands of mortgage deals on the market, it can be really difficult to know which of them could work for your and your circumstances. The easiest way to find the best first-time buyer mortgage deal available to you is to enlist the help of mortgage experts, like ourselves who can also help you get a mortgage in principle. We're an award-winning, free mortgage adviser.

We can help you to find the right mortgage for your needs by:

• Searching the whole market on your behalf to find deals that work for you

• Advising you about the crucial details of mortgage terms that you may overlook or struggle to understand

• Providing help with your application, from completing it for you, through to suggesting improvements to your circumstances and supporting documentation

• Help you with tricky decisions, like whether a fee-free mortgage is worth paying a slightly higher interest rate for or not

How much could I borrow as a first time buyer? 

Most mortgage providers set a multiple of your income that you can borrow, usually around four to five times it.

But it's important to understand that income and affordability are not the same thing. Banks and building societies also consider your regular outgoings when considering how much to lend to you.

It's also important to note that different lenders have different criteria so deals from one bank might suit your circumstances better than another.

So it’s important to find a lender with criteria that matches your circumstances, which is something our experts can help you with.

Is there any help available for first time buyers? 

Yes - there are specialist mortgages and home ownership schemes that are suitable for first-time buyers. You can see some below.

Mortgage types lenders aim at first-time buyers

While first-time buyers have access to similar mortgage options as other buyers, those borrowers lucky enough to have relatives willing and able to help them onto the property ladder have a few additional options available to them from some lenders:

• Gifted deposit - not all lenders allow this, but most will, so long as whoever is giving you the gift confirms its gift-status in writing

• Guarantor mortgages - where a parent or family member agrees to cover the loan costs if you’re not able to - this is usually when you’re unable to meet affordability for repayments on the loan size you need

• Family assisted mortgage - a more up-to-date version of guarantor mortgages, this lets relatives (often parents) to use their savings in lieu of a deposit - it’s then repaid to them when you’ve paid off enough to satisfy the lender’s deposit criteria

Home ownership schemes that apply to first-time buyers

• Shared Ownership scheme - available nationwide and allows you to buy a percentage of a property and rent the remainder

• Deposit Unlock scheme - regional variations exist across the UK. Allows applicants to buy a new build home with 5% deposit - rather than the standard 15%.

• Regional schemes such as the First Homes scheme in England, LIFT Scheme in Scotland and Homebuyer Scheme in Wales are also available to first-time buyers. Read more about UK home ownership schemes

What Stamp Duty will I need to pay as a first-time buyer?

In England and Northern Ireland, you won't pay any Stamp Duty Land Tax on properties worth less than £300,000. You'll then pay 5% SDLT on the portion from £300,001 to £500,000. You won't be able to claim the first-time buyer SDLT discount if the property price is over £500,000, or if you're buying with someone else who is not a first-time buyer.

In Scotland if you're a first-time buyer, you won't need to pay Land and Buildings Transaction Tax on properties up to £175,000.