Your Guide to Securing a Mortgage as a First-Time Buyer in the UK

Understanding the Mortgage Process

Buying your first property is an exciting journey. However, the mortgage process can feel overwhelming. As a first-time buyer in the UK, you’ll have many questions. These may include inquiries about deposits, affordability, mortgage types, and the hidden costs of buying a home.

To make things easier, I’ve compiled the most frequently asked questions first-time buyers ask mortgage brokers, along with clear, jargon-free answers.

1. How Much Can I Borrow as a First-Time Buyer in the UK?

Most UK lenders will lend around 4.5 to 5 times your annual income. Here’s a quick breakdown:

• A salary of £80,000 might give you borrowing power of £360,000–£400,000.

• If there are two buyers with combined incomes, they will be assessed together.

• Outgoings, such as loans, credit cards, and childcare, can reduce the amount you can borrow.

  
  

Tip: Online calculators provide a rough idea, but a mortgage broker can give you a tailored figure.

2. How Much Deposit Do First-Time Buyers Need?

The minimum deposit is usually 5% of the property value. Here’s how it works:

• A 5% deposit allows access to 95% mortgages, although rates can be higher.

• A 10%+ deposit offers a better choice of deals and lower interest rates.

• A 20%+ deposit secures the most competitive rates.

• A 40%+ deposit can get you the very best rates on the market (below 4%).

  
  

Example: For a £400,000 home, you’ll need at least a £20,000 deposit.

3. Do I Need an Agreement in Principle (AIP)?

Yes, you do. An Agreement in Principle, also known as a Decision in Principle (DIP) or a Mortgage in Principle, shows how much you’re likely to be able to borrow. Here’s why it matters:

• Estate agents often ask for one before accepting your offer.

• It usually involves a soft credit check, which won’t harm your credit score.

• While it isn’t a guarantee, it proves you’re a serious buyer.

  
  

Think of it as your spending budget while house-hunting. It can also help you negotiate on the seller's price if used skillfully.

4. What Types of Mortgages Are Available for First-Time Buyers?

The most common mortgage types include:

• Fixed-rate mortgage: The interest rate remains the same for 2–5 years. However, there may be an Early Repayment Charge if you switch deals during the fixed-rate period. The main advantage is that you can access the lowest interest rates, providing certainty in your mortgage payments.

• Tracker mortgage: This type moves with the Bank of England base rate. Your monthly payments can rise or fall, but there is no Early Repayment Charge if you wish to change mortgage products. This is recommended if you need to borrow short-term.

• Discount variable mortgage: Linked to a lender’s standard variable rate. These are often cheaper initially but can be less predictable.

  
  

Most first-time buyers opt for a fixed-rate mortgage due to its stability.

5. What Extra Costs Should I Budget for as a First-Time Buyer?

Besides your deposit, you should budget for several additional costs:

• Solicitor fees: £900–£1,900.

• Survey (Optional): £250–£1,000.

• Stamp Duty: First-time buyers pay nothing on properties below £125,000. After that, the rates are 2% up to £250,000, then 5% on amounts up to £925,000. Beyond that, it’s 10% up to £1,500,000, then 12% for any amount over that. Note: UK Rates are correct as of 2025.

• Moving costs: £500–£1,000.

  
  

Tip: Have at least £3,000–£5,000 ready for fees and moving expenses.

6. How Does My Credit Score Affect Getting a Mortgage?

Your credit history impacts several factors:

• The interest rate you’re offered.

• The number of lenders willing to approve you.

• Whether your application is accepted.

  
  

Action step: Check your credit report before applying with CheckMyFile. They will show your credit score with Experian, Equifax, and TransUnion. Fix errors, avoid missed payments, and pay down debts where possible.

7. Should I Use a Mortgage Broker or Go Direct to a Bank?

A bank only shows its own mortgage deals. In contrast, a broker compares many lenders, which means:

• Potentially lower rates.

• Access to specialist lenders, which is useful if you’re self-employed, have bad credit, or a small deposit.

• Less stress, as the broker handles the paperwork.

• A broker can also switch your mortgage offer to a lower rate during the buying process, which a bank will not do.

  
  

For first-time buyers, using a mortgage broker often saves both time and money.

8. What Government Schemes Help First-Time Buyers?

Several schemes support first-time buyers in the UK:

• Lifetime ISA (LISA): Save up to £4,000 per year and receive a 25% bonus from the government.

• Shared Ownership: Buy part of a property (25%–75%) and pay rent on the rest.

• First Homes Scheme: New-build homes sold at a discount to local first-time buyers and key workers.

  
  

9. How Long Does the Mortgage Process Take?

On average, the process takes 8–12 weeks from when your offer is accepted to when you move in. However, leasehold flats can take longer.

The steps are as follows:

1. Get an Agreement in Principle.

2. Find a property and make an offer.

3. Apply for a mortgage.

4. Valuation and underwriting by the lender (1-2 weeks).

5. Solicitor checks and contracts (2-3 months).

6. Exchange and completion.

   
   

Using a mortgage broker can take the stress out of the process and sometimes speed things up by helping you avoid mistakes.

10. What Mistakes Should First-Time Buyers Avoid?

Common pitfalls include:

• Taking out new loans or credit cards six months before applying.

• Overstretching your budget and leaving no savings cushion.

• Skipping a survey, as hidden repairs can be expensive.

• Not seeking advice and ending up on the wrong mortgage deal.

  
  

Final Thoughts

Getting a mortgage as a first-time buyer in the UK doesn’t need to be daunting. The keys to success are:

• Save a realistic deposit of at least 10%.

• Budget for fees and moving costs.

• Check your credit score early with CheckMyFile.

• Get professional advice to find the right mortgage.

  
  

A mortgage broker can simplify the process, save you money, and give you confidence as you step onto the property ladder.

Additional Resources

Understanding Mortgage Terms

Understanding mortgage terms can help you make informed decisions. Here are a few key terms to know:

• Principal: The amount of money you borrow.

• Interest: The cost of borrowing money, usually expressed as a percentage.

• Amortisation: The process of paying off a loan over time through regular payments.

  
  

Preparing for Your Mortgage Application

Before applying for a mortgage, gather necessary documents. This typically includes:

• Proof of income (payslips, tax returns).

• Bank statements.

• Identification (passport, driver's license).

  
  

Having these ready can streamline the application process.

The Importance of a Good Credit Score

A good credit score can open doors to better mortgage rates. Here are some tips to improve your score:

• Pay bills on time.

• Reduce outstanding debts.

• Avoid opening new credit accounts before applying for a mortgage.

  
  

Conclusion

Navigating the mortgage landscape as a first-time buyer can be challenging, but with the right information and support, you can find the perfect mortgage for your needs. Remember to take your time, do your research, and seek professional advice when needed. The journey to homeownership is within your reach!