By Property Insights UK · Published June 2026 · 18 min read
Buying your first home is exciting, but understanding first time buyer mortgages can feel confusing at the start. You need to know how much deposit you will need, how much you may be able to borrow, what your monthly repayments could look like, and when to get a mortgage in principle. This guide explains the main steps clearly, so you can plan your budget, compare your options and feel more prepared before you start viewing homes.
Key information
- •A first time buyer mortgage is designed for people buying their first home.
- •Most first time buyers usually need at least a 5% deposit, although a bigger deposit can give you access to more mortgage deals and potentially better rates.
- •The amount you can borrow depends on your income, outgoings, credit history, deposit and lender affordability checks.
- •A mortgage calculator can help you estimate monthly repayments before you apply.
- •A mortgage in principle can show estate agents and sellers that you are a serious buyer.
- •You should also budget for extra costs such as stamp duty, solicitor fees, survey fees, mortgage fees, moving costs and insurance.
- •Before choosing a property, check local prices, transport, schools, amenities and area trends using Property Reports and Area IQ.
What is a first time buyer mortgage?
A first time buyer mortgage is a home loan for someone buying their first residential property. In simple terms, the lender gives you money to buy the home, and you repay it monthly over an agreed mortgage term.
A first time buyer is usually someone who has never owned a residential property before, either in the UK or abroad. Even if it is called first-time buyer, it really means first-time homeowner. If you have inherited or previously owned a home, you may not qualify as a first time buyer for some schemes or benefits.
How much deposit do I need to buy a house?
Most first time buyers usually need at least a 5% deposit of the property price. This means if you are buying a home for £250,000, a 5% deposit would be £12,500.
Here are simple examples:
| Property price | 5% deposit | 10% deposit | 15% deposit |
|---|---|---|---|
| £200,000 | £10,000 | £20,000 | £30,000 |
| £250,000 | £12,500 | £25,000 | £37,500 |
| £300,000 | £15,000 | £30,000 | £45,000 |
| £350,000 | £17,500 | £35,000 | £52,500 |
A 5% deposit may help you get on the property ladder sooner, but a 10% or 15% deposit can make your mortgage application stronger. A larger deposit usually means you borrow less, your loan-to-value is lower, and you may be offered more competitive mortgage rates.
Should first time buyers save a 5% or 10% deposit?
A 5% deposit can work if you have stable income, good credit and enough money left for buying costs. However, it is not always the cheapest option.
A 10% deposit is often a stronger position because:
- You may access more mortgage products.
- Your monthly payments may be lower.
- You may get a better interest rate.
- You have more protection if house prices fall.
- Lenders may see you as lower risk.
But there is a balance. Waiting too long to save a bigger deposit could mean house prices or rents change while you are still saving. Compare both options using our mortgage payment calculator to see the difference between a 5%, 10% and 15% deposit.
How much can I borrow as a first time buyer?
How much you can borrow depends on your personal finances. Lenders usually look at:
- Your income
- Your partner's income, if buying jointly
- Existing debts
- Credit cards and loans
- Childcare costs
- Regular bills
- Deposit size
- Credit history
- Employment type
- Mortgage term
- Interest rate
Many buyers start by estimating affordability with a mortgage calculator. This gives you a rough idea of what your monthly repayments could be, but it is not the same as a lender's full affordability check.
Use the Property Insights UK Mortgage Calculator to test different property prices, deposit amounts, mortgage terms and interest rates.
How do first time buyer mortgage rates work?
First time buyer mortgage rates are affected by several things, including deposit size, loan-to-value ratio, credit score, income stability, mortgage term, fixed or variable rate choice, wider interest rates, lender criteria and property type.
The deposit has a major impact. A buyer with a 10% or 15% deposit may have access to better deals than a buyer with a 5% deposit, because the lender is taking less risk.
Fixed-rate mortgage: Your interest rate stays the same for a set period, often two, three or five years. This gives more certainty because your monthly payment stays the same during the fixed period.
Tracker mortgage: Your rate moves in line with another rate, usually the Bank of England base rate plus a set percentage. Payments can go up or down.
Standard variable rate: This is the lender's own variable rate. It is often more expensive than fixed or tracker deals, especially after an initial mortgage deal ends.
For most first time buyers, the main question is not just what is the lowest rate. It is what monthly payment is realistic and safe for your budget.
Use a mortgage calculator before you view homes
A mortgage calculator helps you understand the numbers before you get emotionally attached to a property. You can use it to check:
- How much your monthly payments could be
- How payments change with a bigger deposit
- How interest rates affect affordability
- Whether a longer or shorter mortgage term changes the budget
- Whether the property price is realistic for your income
For example, if the monthly payment looks affordable at today's rate but unaffordable if rates rise, that is a warning sign. First time buyers should avoid stretching so far that they have no room left for bills, repairs, furniture or emergencies.
Use the Property Insights UK Mortgage Payment Calculator before viewing homes, then use it again when comparing mortgage rates.
Mortgage payment calculator → Affordability calculator →What is a mortgage in principle?
A mortgage in principle is a statement from a lender showing how much they may be willing to lend you based on basic information about your income, spending and credit profile.
It is also called agreement in principle, decision in principle, mortgage promise, AIP or DIP. It is not a guaranteed mortgage offer, but it can help you understand your budget and show estate agents that you are serious. You usually get a mortgage in principle before making an offer on a property.
When should I get a mortgage in principle?
You should usually get a mortgage in principle once you have saved your deposit, checked your credit file, worked out your monthly budget, used a mortgage calculator and started seriously looking at homes. Do not leave it too late. If you find a property you like, the estate agent may ask for proof that you can afford it.
Want help finding the right first time buyer mortgage? Our fee free mortgage partner can talk through your options with no broker fee charged to you.
Get fee free mortgage advice →What documents do first time buyers need for a mortgage?
Lenders usually ask for proof of your identity, income and spending. You may need:
- Passport or driving licence
- Proof of address
- Payslips
- Bank statements
- P60, if employed
- Tax calculations and business accounts, if self-employed
- Proof of deposit
- Evidence of gifted deposit, if family is helping
- Details of loans, credit cards and other debts
Self-employed applicants may need tax returns and business accounts for the last two or three years.
What other costs do first time buyers need to budget for?
Your deposit is not the only cost. This is where many first time buyers underestimate the total amount needed. You may also need money for:
- Mortgage arrangement fee
- Valuation fee
- Survey fee
- Solicitor or conveyancer fees
- Searches
- Stamp duty, if applicable
- Buildings insurance
- Moving costs
- Furniture and appliances
- Repairs and decorating
- Emergency savings
Before making an offer, use the Property Insights UK Stamp Duty Calculator to check whether stamp duty applies to your purchase.
Do first time buyers pay stamp duty?
First time buyers in England may pay less stamp duty than other buyers, depending on the property price and current rules. Because stamp duty thresholds can change, it is important to check the latest calculation before budgeting.
Use the Stamp Duty Calculator to estimate your potential stamp duty cost based on the property price and buyer type. A property that looks affordable based on deposit and mortgage payments may become less affordable once stamp duty, legal fees and moving costs are included.
How to choose the right area before buying
A mortgage tells you what you may be able to borrow, but it does not tell you whether the area is right for your lifestyle or long-term plans. Before buying, check local sold prices, price trends, schools, transport links, crime levels, nearby shops and services, commute times, rental demand, planned developments, flood risk and broadband availability.
This is where Property Reports and Area IQ can help. They support your research before you make an offer, so you are not relying only on the estate agent's description.
A first time buyer should not only ask, can I afford this house. The better question is, can I afford it, and is this the right property in the right area?
Step-by-step: how to get a first time buyer mortgage
- Save your deposit. Start with your target property price and work backwards. If you want to buy a £250,000 home, you will usually need at least £12,500 for a 5% deposit, plus extra money for fees and moving costs.
- Check your credit file. Check your credit reports before applying. Look for mistakes, unpaid accounts or incorrect addresses.
- Use a mortgage calculator. Use the Mortgage Calculator to estimate monthly repayments.
- Check stamp duty and buying costs. Use the Stamp Duty Calculator and make a full buying budget.
- Research the area. Use Property Reports and Area IQ to understand the area properly before making an offer.
- Get a mortgage in principle. This helps you understand your budget and shows estate agents you are ready to proceed.
- View properties within budget. Do not only search at the top of your budget. Leave room for negotiation, repairs and unexpected costs.
- Make an offer. Check comparable sold prices before offering.
- Apply for the mortgage. Once your offer is accepted, submit your full mortgage application.
- Complete the legal process. Your solicitor or conveyancer handles searches, contracts and completion.
Common mistakes first time buyers should avoid
- Only saving for the deposit. You also need money for fees, moving costs, furniture and emergencies.
- Borrowing the maximum possible amount. A lender may offer a certain amount, but that does not mean it is comfortable for your lifestyle.
- Ignoring local area research. The property itself matters, but the area can affect lifestyle, resale value and long-term satisfaction.
- Forgetting future costs. Repairs, insurance, service charges, ground rent, council tax and energy bills can change your real affordability.
- Not comparing mortgage options. Different lenders have different criteria. A fee free mortgage broker may help if your situation is more complex.
- Viewing homes before understanding your budget. Start with the numbers first.
First time buyer mortgage checklist
Before you apply, check that you have:
- Saved your deposit
- Budgeted for buying costs
- Checked your credit file
- Used a mortgage calculator
- Compared monthly repayments
- Checked stamp duty
- Researched the area
- Reviewed property reports
- Got a mortgage in principle
- Prepared your documents
- Considered whether you need mortgage advice
Final thoughts
A first time buyer mortgage is easier to understand when you break it into clear steps: deposit, affordability, mortgage rates, mortgage in principle, property research and final application. Most buyers should start by working out how much deposit they have, what they can realistically afford each month, and whether the area they are buying in makes sense.
Use the Mortgage Calculator to estimate repayments, the Stamp Duty Calculator to check buying costs, and Property Reports and Area IQ to research the property and local area before making an offer.
Buying your first home is a big decision, but good preparation can help you avoid expensive mistakes.
FAQs
How much deposit do I need to buy a house?
Most first time buyers usually need at least a 5% deposit. For a £250,000 property, that would be £12,500. However, a 10% or 15% deposit can often give you more mortgage choice and potentially better rates.
Can I get a first time buyer mortgage with a 5% deposit?
Yes, some lenders offer 95% mortgages, meaning you provide a 5% deposit and borrow the remaining 95%. This is subject to lender criteria, affordability checks and property type.
Is a 10% deposit better than 5%?
Usually, yes. A 10% deposit can reduce the amount you borrow, lower your loan-to-value and may give you access to better mortgage deals. However, it depends on your income, savings, house price and how quickly you want to buy.
What is a mortgage in principle?
A mortgage in principle is an indication from a lender of how much they may be willing to lend you. It is not a final mortgage offer, but it can help you understand your budget and show sellers that you are serious.
How much can I borrow as a first time buyer?
The amount you can borrow depends on your income, deposit, debts, credit history and monthly spending. A mortgage calculator can give you an estimate, but the lender will make the final decision after a full affordability check.
Do first time buyers pay stamp duty?
First time buyers may qualify for stamp duty relief depending on the property price and current rules. Use a stamp duty calculator before making an offer so you do not underestimate your buying costs.
What credit score do I need for a first time buyer mortgage?
There is no single credit score that guarantees approval. Lenders look at your full financial situation, including income, debts, payment history, deposit and affordability. A clean credit file can improve your chances.
Should I use a mortgage broker?
A mortgage broker can be useful, especially if you are self-employed, have a small deposit, have credit issues or want help comparing lenders. Some brokers charge fees and some are fee-free, so check before using one.
What is the difference between a mortgage calculator and a mortgage in principle?
A mortgage calculator gives an estimate based on the figures you enter. A mortgage in principle is based on lender criteria and gives a clearer indication of what you may be able to borrow.
Should I check the area before applying for a mortgage?
Yes. The mortgage tells you whether the purchase may be financially possible, but local research helps you decide whether the property is a good choice. Check sold prices, schools, transport, amenities and area trends before making an offer.
This guide is provided by Property Insights UK for general information only. It does not constitute mortgage, financial or legal advice. For regulated mortgage advice, speak to a qualified adviser or our fee free mortgage partner.
