First-Time Buyer Mortgages


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First Time Buyer

Purchase Your First House

Buying your first home is an exciting journey, and securing the right mortgage is crucial in making that dream a reality. At Believe Money, we understand that the mortgage process can seem complex, but we’re here to make it straightforward and accessible.

  • Lifetime mortgage could be the perfect way to borrow money for retirement.
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  • Our mortgage brokers supports you at every step of the way, helping you make the best choice for your financial future.
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First Time Buyer

Purchase Your First House

What is a first-time buyer mortgage?

A first-time buyer mortgage is a loan specifically designed for individuals purchasing their first home. These mortgages often come with special incentives such as lower interest rates, smaller deposits, and government-backed schemes to make the process more accessible and affordable for those taking their first step on the property ladder.

To be considered a first-time buyer, you must have never owned any residential property before, either in the UK or abroad. This means you can’t have any property in your name, whether full ownership, shared ownership, or an inherited property.

Additionally, if you’re buying a home with someone else, both of you must meet these criteria to be eligible for first-time buyer benefits.

Who qualifies for a first-time buyer mortgage?

To be considered a first-time buyer, you must have never owned any residential property before, either in the UK or abroad. This means you can’t have any property in your name, whether full ownership, shared ownership, or an inherited property.

Additionally, if you’re buying a home with someone else, both of you must meet these criteria to be eligible for first-time buyer benefits.

How do first-time buyer mortgages work?

First-time buyer mortgages operate similarly to standard mortgages but are specifically tailored to the unique needs of those entering the property market for the first time.

Here’s a breakdown of how they work:

Lower deposit requirements
Many lenders offer first-time buyer mortgages with deposits as low as 5% of the property's value. This can be especially beneficial for those who may not have significant savings.

Government schemes

First-time buyers can access several affordable home ownership schemes such as Help to Buy, Shared Ownership, and Lifetime ISAs. These programmes provide financial assistance through equity loans, shared ownership options, and savings boosts of up to 25%.


Competitive interest rates

Lenders often offer competitive interest rates to first-time buyers, making monthly payments more affordable and helping new buyers manage their finances better.

Mortgage agreement in principle
This agreement from a mortgage provider indicates how much they might be willing to lend you based on your financial situation. It’s a useful tool when you start looking for properties, as it shows sellers and estate agents that you're a serious buyer.

Flexible lending criteria

Some lenders offer more flexible criteria for first-time buyers, considering factors like future earning potential, especially for young professionals.

Benefits of a first-time buyer mortgage

First-time buyer mortgages come with a range of benefits designed to make the home-buying process more accessible and affordable, for example:
Stamp duty relief:
In England and Northern Ireland, first-time buyers do not pay Stamp Duty on properties up to £425,000. A reduced rate applies for properties above this threshold, significantly lowering the initial purchase costs.

Access to special deals:

Many lenders offer exclusive deals to first-time buyers, including cashback offers, reduced fees, and lower interest rates, lowering the overall cost of borrowing.

Support and guidance:

Lenders often provide first-time buyers with additional support and resources, such as personalised advice, home buying guides, and educational resources, to help them navigate the process.

Enhanced borrowing capacity:

Some lenders offer higher loan-to-value (LTV) ratios or allow parents to act as guarantors, increasing the borrowing capacity of first-time buyers and enabling them to purchase higher-value properties.

Credit building:

Successfully managing a first-time buyer mortgage can help build a strong credit history, which can benefit future financial transactions and borrowing.

How much deposit does a first-time buyer need?

Most first-time buyers typically need a deposit of 5% to 20% of the property’s value. The size of your deposit can significantly impact the type of mortgage you can secure, the interest rates available, and your monthly repayments.

Here’s a detailed look at what to expect based on different deposit sizes:


5% deposit

Many lenders offer first-time buyers 95% loan-to-value (LTV) mortgages, meaning you only need a 5% deposit. This is supported by the government’s mortgage guarantee scheme, which aims to encourage lenders to offer higher LTV mortgages.

Remember that while a 5% deposit can help you get on the property ladder, interest rates may be higher than mortgages with larger deposits, as the lender’s risk is greater.


10-20% deposit

Providing a larger deposit, such as 10-20% of the property’s value, can secure better interest rates. Lenders view borrowers with larger deposits as less risky, which can result in lower monthly repayments.

A larger deposit opens up a wider range of mortgage products, giving you more flexibility to choose terms that better suit your situation. Also, with a larger deposit, you might be able to borrow more, as the reduced risk to the lender can increase the amount they are willing to lend you.


20%+ deposit

Deposits of 20% or more can attract the lowest interest rates available. Plus, starting with more equity in your home can be beneficial if property values fluctuate, providing you with a financial cushion and greater security.

Which type of first-time buyer mortgage is best for me?

Fixed-rate mortgages
  • Stability: Fixed-rate mortgages offer a set interest rate for a specified period, usually 2, 3, 5, or 10 years. This provides predictability in your monthly payments, making it easier to budget.
  • Certainty: This option is ideal if you want to avoid the risk of interest rate fluctuations and prefer knowing exactly how much your monthly mortgage payments will be.
  • Long-term planning: This option is suitable for those who plan to stay in their property for a long period and want financial stability.

Tracker mortgages

  • Variable rates: Tracker mortgages follow the Bank of England base rate plus a set percentage, meaning your payments can go up or down depending on interest rate changes.
  • Potential savings: This type of mortgage is great if you believe interest rates will stay low or decrease, as this can reduce your monthly payments.
  • Flexibility: More suited for those who are comfortable with some level of uncertainty and potential rate changes.

Discount mortgages

  • Initial lower payments: These mortgages offer a fixed percentage discount on the lender’s standard variable rate (SVR) for an initial period, usually 2-5 years.
  • Savings: This type of mortgage can provide lower initial payments than other types, which can be helpful when buying a home.
  • Consideration: If the lender's SVR rises or falls at any point, your interest rate will also rise or fall in line with it; the percentage discount, however, will remain the same. Be mindful that after the discount period, the rate will revert to the SVR, which may be higher.
Offset mortgages
  • Linking savings and mortgage: Offset mortgages link your savings account to your mortgage. The balance in your savings account is offset against the amount you owe on your mortgage, reducing the interest charged.
  • Tax efficiency: Interest earned on savings is tax-free as it reduces mortgage interest.
  • Flexibility: This option is ideal for those with substantial savings who want to reduce their mortgage interest and potentially pay off their mortgage faster.

Guarantor mortgages

  • Support from family: With a guarantor mortgage, a family member or close friend guarantees the mortgage, typically using their own property or savings as collateral.
  • Increased borrowing power: The guarantor's backing allows you to borrow more or secure a mortgage with a smaller deposit.
  • Risks for guarantor: The guarantor is responsible if you fail to make payments, so it’s a significant commitment for them.

Shared ownership

  • Part buy, part rent: Shared ownership allows you to buy a portion of a property (usually between 25% and 75%) and pay rent to a housing association on the remaining share.
  • Lower initial costs: This can significantly lower the initial amount needed for a deposit and monthly costs.
  • Staircasing: You can buy more shares in the property over time, potentially owning it outright in the future.
Help to buy equity loan
  • Government support: The Help to Buy equity loan scheme allows you to borrow up to 20% (40% in London) of the property’s value from the government, with no interest for the first five years.
  • Lower deposit: You only need a 5% deposit and a 75% mortgage to make up the rest.
  • New builds: Available only on new-build properties, making it ideal if you prefer a brand-new home.

Interest-only mortgages

  • Lower initial payments: You pay only the interest on the mortgage each month, making initial payments lower than repayment mortgages.
  • Repayment strategy: You need a clear plan to repay the mortgage capital at the end of the term, as the full loan amount will still be owed.
  • Suitable for certain buyers: Often used by buy-to-let investors, but can be considered by first-time buyers with a strong repayment strategy.

How much can I borrow with my first-time buyer mortgage?


Lenders typically allow you to borrow up to 4.5 times your annual income - for example, if you earn £30,000 per year, you might be able to borrow up to £135,000. This can vary depending on the lender and your overall financial situation.

Joint mortgage application

If you are applying for a mortgage with a partner, lenders will consider both incomes, potentially increasing the total amount you can borrow.



During the application process, lenders conduct affordability checks to determine how much you can realistically afford to repay each month, considering your lifestyle and spending habits.

Lenders will assess your regular outgoings, including existing debts, utilities, childcare costs, and other financial commitments, to ensure you can afford your mortgage repayments. They use this information to calculate your debt-to-income ratio, ideally below a certain threshold.


Credit score

A good credit score can significantly

Loan-to-value ratio (LTV)

The size of your deposit affects how much you can borrow. A larger deposit reduces the LTV ratio, potentially allowing you to borrow more or secure better interest rates. For example, with a 20% deposit, you may access more favourable mortgage terms than a 5% deposit.

Property value

The value of the property you wish to purchase is also a key factor. Lenders typically finance a percentage of the property value up to a maximum LTV ratio.

Employment and financial stability

Lenders prefer borrowers with stable employment and a steady income. Long-term employment in the same industry or with the same employer can positively influence your mortgage application.

If you're self-employed, lenders typically require additional documentation, such as tax returns and business accounts, to assess your income stability and reliability.

What else should I consider when getting a mortgage for my first home?

Additional costs:

Other costs such as stamp duty land tax, legal fees, survey costs, and moving expenses need to be considered, as well as the deposit. It’s important to budget for these to avoid any surprises.

Credit score:

Improving your credit score before applying can increase your chances of getting a favourable mortgage rate. You can do this by paying off existing debts, avoiding new credit applications, and ensuring all bills are paid on time.

Future plans:

Consider how long you plan to stay in the property and choose a mortgage that suits your plans. For instance, a fixed-rate mortgage might be best if you plan to stay for the length of the mortgage deal term, while a tracker mortgage might be suitable if you expect to move or refinance soon.


Ensure you can comfortably afford the monthly repayments, even if interest rates rise. Use our mortgage calculator to estimate your repayments based on different scenarios.

Buildings insurance:

Most mortgage lenders require you to have building insurance in place as a condition of the loan. This means that their investment is protected as it covers the cost of repairing or rebuilding your home if it is damaged by events such as fire, flooding, or subsidence.

Ready to apply for your first mortgage?

t Believe Money, we know that buying your first home is a big step, and we’re here to make the process as smooth as possible for you. Our friendly mortgage brokers are ready to help you secure the best first-time buyer mortgage tailored to your needs.

Whether you want to start your mortgage application or have questions about the mortgage completion process, we’re here to help.

Reach out to us today, and let’s get you closer to owning your dream home.

Contact Believe Money now to speak with a mortgage broker and take the first step towards owning your first home!


What is the minimum income to qualify for first-time buyers?

There is no specific minimum income required to qualify for a first-time buyer mortgage, but your income will influence how much you can borrow. Lenders will assess your income, outgoings, and credit history to determine your affordability.

Is it easier to get a mortgage as a first-time buyer?

First-time buyers often have access to various supportive schemes and mortgage products that can make it easier to secure a mortgage. However, the basic criteria for approval, such as meeting affordability checks and having a good credit score, still apply.

What's the difference between repayment mortgages and interest-only mortgages?

With a repayment mortgage, your monthly payments cover both the interest and the loan amount, meaning the mortgage is fully paid off by the end of the term. This helps you build equity in your home.

In contrast, an interest-only mortgage requires you to pay only the interest each month, with the balance due at the end of the term.

How It works

Step 1.

Simple, easy application

Step 2.

We search our panel of lenders to find the deal that’s right for you

Step 3.

When you confirm your chosen deal, we get your application moving

Step 4.

The money lands in your bank
account – usually within two weeks

Believe is powered by Clicktech

We want you to get your quote quickly and start your loan journey as soon as you’re ready. So we’ve developed a powerful technology platform, called Clicktech, that makes the process fast and efficient with you in control.

Following a chat with one of our friendly advisors, we link you to our simple online portal where you can enter the brief information we need. We then search our panel of over 800 lenders and deliver the most competitive quotes quickly and easily, in moments.

And once you’ve made your choice, Clicktech keeps things moving, helping you get your money in as few as ten days.

We compare loans from our panel of the UK’s top lenders to get you the best deal.


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