First time buyers mortgage advice

Mortgages for first time home buyers


    First time buyers mortgage advice

    The basics

    What is a first-time buyer mortgage?

    A first-time buyer mortgage is a home loan for someone who has never owned a residential property before, in the UK or anywhere else in the world. Because you have no property to sell and no track record of managing a mortgage, lenders assess your application slightly differently to a home mover’s.

    The good news is that first-time buyers are the group lenders and the government are most keen to support. You can typically access the widest range of deposit-boosting schemes, stamp duty relief, and 95% loan-to-value mortgages designed specifically to get you on the ladder sooner.

    The trade-off is that a smaller deposit and no prior mortgage history usually means a higher rate than an existing homeowner with equity would get — which is exactly why comparing the whole market, rather than just your bank, matters most at this stage.

    Key fact: The average first-time buyer house price stood at £226,000 in early 2026, up 1.3% year-on-year — which means most first-time buyers currently pay no stamp duty at all, as relief covers purchases up to £300,000.

    Am I a first-time buyer?

    Situations that catch people out

    You inherited a property
    Even if you sold it immediately or never lived in it, inheriting a property counts as ownership and can affect your first-time buyer stamp duty status.
    You’re buying with someone who has owned before
    If you buy jointly, both applicants generally need to be first-time buyers to claim stamp duty relief, though mortgage lenders may still assess you individually for other purposes.
    You owned property abroad
    First-time buyer status considers property ownership anywhere in the world, not just the UK, this includes property owned overseas before moving here.
    You were named on a mortgage but not the deeds
    Being a guarantor or named on a mortgage without holding legal or beneficial title does not usually count as previous ownership. Rules vary by lender, so it is worth checking your specific case.

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    Schemes to help you buy

    First-time buyer schemes compared

    There is no single “best” scheme, the right one depends on your deposit, income, and the type of property you’re buying. Here is how the main options compare.

    Scheme Min. deposit Price cap Property type What it means for you
    Mortgage Guarantee Scheme
    “Freedom to Buy”
    		 5% £600,000 Any (new or existing) Made permanent in July 2025. The government guarantees part of the loan to your lender, making 95% mortgages more widely available at competitive rates.
    First Homes Scheme
    England only
    		 5% Local, discounted New build only Buy a new-build home at a 30–50% discount to market value. You must earn under £80,000 (£90,000 in London) and be a genuine first-time buyer.
    Shared Ownership
    Part-buy, part-rent
    		 5–10% Varies by scheme Housing association homes Buy a 10–75% share and pay reduced rent on the rest. You can “staircase” to buy more of the property over time as your finances allow.
    Lifetime ISA (LISA)
    Savings top-up
    		 N/A £450,000 Any Save up to £4,000 a year and the government adds a 25% bonus (worth up to £1,000 a year) towards your deposit.
    Deposit Unlock / Own New Rate Reducer
    Housebuilder-backed
    		 5% Varies by lender New build only Housebuilders subsidise your rate or top up your deposit, so you can access near-mainstream pricing on a low deposit for a new-build home.
    Help to Buy
    Wales only
    		 5% £300,000 New build only The equity loan scheme closed in England in 2023, but remains available to first-time buyers purchasing a new-build home in Wales.

    Eligibility criteria change frequently and some schemes are regional. Speak to a broker to confirm what you currently qualify for.

    Your situation

    First-time buyer mortgages for every situation

    No two first-time buyers look the same. Here are the situations we help with most often.

    Small deposit

    95% mortgages with a 5% deposit
    Thanks to the permanent Mortgage Guarantee Scheme, 5% deposit mortgages are now widely available on properties up to £600,000. We compare scheme and non-scheme 95% deals side by side.

    Family support

    Gifted deposits and guarantor mortgages
    If family are helping with a deposit or acting as guarantor, lenders have specific paperwork requirements, like a gifted deposit letter, source-of-funds checks, and sometimes a solicitor’s declaration. We handle this correctly first time.

    Buying together

    Joint mortgages with a partner or friend
    Most lenders accept up to four applicants on a joint mortgage, and combining incomes can significantly increase what you can borrow. It’s worth deciding early whether you’ll own as joint tenants or tenants in common, and knowing that one applicant’s credit history or existing debt affects the whole application.

    Mixed status

    Buying jointly when only one of you is a first-time buyer
    HMRC treats this  as a single transaction, so if either applicant has owned property before, first-time buyer stamp duty relief is lost. Mortgage lenders, however, still assess affordability across both incomes, so borrowing power isn’t affected in the same way. We’ll help you weigh whether buying solely in the first-time buyer’s name, if affordability allows.

    Self-employed

    Self-employed first-time buyers
    Most lenders want two to three years of accounts, but a growing number will consider one year’s trading history or use an accountant’s projection. We know which lenders are flexible. Please see our full guide on self-employed mortgages.

    Credit history

    First-time buyer with bad credit
    Being a first-time buyer with an imperfect credit file narrows your options but rarely closes them completely. Specialist lenders assess the type, severity, and age of the issue individually, see our dedicated bad credit mortgage guide.

    New build

    Buying a new-build home
    New-build purchases often come with tight exchange deadlines and developer incentives that need checking. We’re familiar with the local Colchester and Essex developments and their preferred-lender panels. Please see our full new build mortgage guide.

    Shared ownership

    Buying your first share through Shared Ownership
    Not every lender offers shared ownership mortgages, and rules on staircasing and rent affordability vary between housing associations. Whole-of-market access means we find lenders who understand the scheme.

    What to expect in 2026

    First-time buyer mortgage rates and stamp duty

    As a general rule, the bigger your deposit, the lower your rate, but the gap between a 5% and 25% deposit has narrowed in 2026, meaning it’s often worth applying sooner rather than waiting years to save more.

    On stamp duty, first-time buyers currently pay nothing on the first £300,000 of a purchase, and 5% on the portion between £300,001 and £500,000. If the property costs more than £500,000, standard rates apply with no first-time buyer relief.

    Worth knowing: With the average UK first-time buyer house price at £226,000, most buyers currently fall entirely within the £0 stamp duty band — but this varies hugely by region, and London buyers should budget carefully.
    5% deposit (95% LTV)
    Mortgage Guarantee Scheme & 95% deals
    From 5.08%
    5-year fixed
    10% deposit (90% LTV)
    Widely available across most lenders
    From 4.51%
    5-year fixed
    15% deposit (85% LTV)
    Better rates start to open up here
    From 4.36%
    2-year fixed
    25%+ deposit (75% LTV)
    Access to the most competitive pricing
    From 4.26%
    5-year fixed

    Indicative lowest rates, updated 9 July 2026, based on Mortgage Advice Bureau data via HomeOwners Alliance. Rates change daily and depend on individual circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.

    Getting ready

    How to improve your chances of mortgage approval

    Lenders look far beyond your deposit. Bank statements, credit history, and spending patterns are all reviewed in detail — often going back three to six months.

    Getting these fundamentals right before you apply, rather than after a decline, protects your credit file and gives you the strongest possible application from the outset.

    ✓
    Get an Agreement in Principle before house-hunting.
    This tells you and estate agents how much you can realistically borrow, and strengthens your position when making an offer.
    ✓
    Register to vote at your current address.
    Being on the electoral roll is one of the quickest wins for your credit score and takes minutes to do.
    ✓
    Tidy up your bank statements.
    Reduce gambling transactions, unauthorised overdraft use, and buy-now-pay-later balances for at least three months before applying — underwriters review these closely.
    ✓
    Use a Lifetime ISA if you’re eligible.
    A 25% government bonus on top of your own savings is one of the fastest ways to grow a deposit, but you must open one before your 40th birthday.
    ✓
    Avoid new credit applications before applying.
    Every hard search leaves a mark on your file. Hold off on car finance, new credit cards, or phone contracts in the months before your mortgage application.
    ✓
    Budget for costs beyond the deposit.
    Factor in solicitor’s fees, surveys, mortgage arrangement fees, and moving costs, typically an additional £2,000–£3,500 on top of your deposit and any stamp duty due.
    ✓
    Speak to a whole-of-market broker before applying anywhere.
    We’ll tell you honestly what you can borrow and which lenders suit your situation, before a single application touches your credit file.

    How it works

    Buying your first home with Fosters Financial

    We’ve helped first-time buyers across Colchester and Essex navigate the process from initial chat to moving day.

    01
    Free consultation
    We start with a no-obligation conversation about what you can afford, which schemes you qualify for, and what to budget for. Nothing touches your credit file at this stage.
    02
    Agreement in Principle
    We search the whole market and secure your Agreement in Principle, so you can house-hunt with a clear budget and a stronger negotiating position with sellers and agents.
    03
    Application submitted
    Once your offer is accepted, we handle the full application and liaise with the lender, solicitor, and estate agent on your behalf. Our fixed fee of £499 is only payable at this stage.
    04
    Mortgage offer to moving day
    We support you through survey, exchange, and completion, and stay in touch for protection advice and when your fixed rate is due for renewal.
    No-obligation assessment
    Whole-of-market access
    £499 fixed fee, only on success

    Frequently Asked Qestions

    Mortgage advice first time buyers

    • How much deposit do I need to buy my first home?

      Most first-time buyer mortgages require a minimum deposit of 5% of the purchase price, thanks to the government’s Mortgage Guarantee Scheme and widely available 95% mortgages. However, the deposit you actually need depends on your goals: a 10–15% deposit typically unlocks meaningfully better rates. According to UK Finance, the average first-time buyer deposit in England is £63,855, while Aldermore’s 2026 First Time Buyers Index puts the national average nearer £89,400 (25.6% of the purchase price) as more buyers save longer for better rates. Regional averages are considerably lower — typically £30,000–£40,000 in Scotland, Wales, and Northern Ireland.

    • Do first-time buyers still pay stamp duty in 2026?

      Since 1 April 2025, first-time buyers pay no stamp duty on the first £300,000 of a property’s purchase price, and 5% on the portion between £300,001 and £500,000. If the property costs more than £500,000, first-time buyer relief does not apply and standard stamp duty rates are charged on the full amount instead. With the average UK first-time buyer house price at around £226,000, most buyers currently pay no stamp duty at all — though this varies significantly by region, particularly in London and the South East.

    • What is the Freedom to Buy (Mortgage Guarantee) Scheme?

      Freedom to Buy is the government’s permanent Mortgage Guarantee Scheme, in place since July 2025. It works by having the government guarantee a portion of the loan to participating lenders (including Lloyds, Halifax, NatWest, Santander, Barclays, and HSBC) which reduces their risk and encourages them to offer 95% loan-to-value mortgages at competitive rates. You can use it on any property, new or existing, up to £600,000, provided it will be your only home and you meet standard affordability checks.

    • Can I get a 100% mortgage with no deposit at all?

      Yes, though the options are limited and criteria specific. Genuine 100% mortgages exist — such as Skipton Building Society’s Track Record mortgage — but typically require you to demonstrate a strong history of paying rent on time, usually 12 months or more, alongside a good credit score and affordability. Some other “no deposit” routes rely on a family member offering savings as security or a guarantor arrangement rather than a true zero-deposit product. These deals tend to carry higher rates than a 5% deposit mortgage, so it’s worth comparing both routes with a broker.

    • How does a Lifetime ISA help with my first home?

      A Lifetime ISA (LISA) lets you save up to £4,000 a year towards your first home, and the government adds a 25% bonus on top — worth up to £1,000 a year. You must be 18–39 to open one, keep it open for at least 12 months before using it, and the property you buy must cost £450,000 or less. It’s one of the most efficient ways to build a deposit, but withdrawing the money for anything other than a first home or retirement incurs a penalty, so it’s worth planning your timeline carefully.

    • How much can I borrow as a first-time buyer?

      Most lenders will offer up to 4–4.5 times your annual income as a standard maximum, though some lenders offer up to 5 or even 5.5 times income for certain professions, higher earners, or through specific first-time buyer schemes. Your actual borrowing amount also depends on your outgoings, existing credit commitments, dependents, and the interest rate stress-tested by the lender. A broker can run an affordability check across multiple lenders to find where you’ll be offered the most.

    • Can I still get a mortgage as a first-time buyer with bad credit?

      Yes, though your options will be narrower than for a buyer with a clean credit history. Specialist lenders assess first-time buyers with adverse credit on a case-by-case basis, weighing up the type, severity, and age of the issue. A deposit of 15–25% and a stable income will significantly improve your chances. Using a specialist broker matters here in particular, since a declined application from the wrong lender leaves a mark on your file that can affect future applications — see our dedicated guide to bad credit mortgages for more detail.

    • How long does the mortgage process take from application to moving in?

      Getting a full mortgage offer typically takes two to six weeks from a completed application, depending on the lender and how straightforward your circumstances are. From an accepted offer to actually moving in, most first-time buyer purchases in the UK take around three to five months once conveyancing, surveys, and searches are factored in. Chains, leasehold properties, and new-build purchases can extend this timeline, which is why getting your Agreement in Principle and paperwork ready early makes a real difference.

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