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Compare first time buyer mortgages rates
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See first time buyer mortgage rates from 90+ lenders across whole of market
Can I get a first time buyer mortgage?
If you’ve never owned a home before, you'll be considered a first time buyer, which means you can apply for a first time buyer mortgage.
If you are buying as a couple, if neither partner has ever previously owned a home, you are both classed as first time buyers. If one of you has previously bought a property, the other will forfeit their first time buyer status.
If you've inherited property, you won’t be able to apply for a first time buyer mortgage. Although you'd be buying for the first time, the rules state that you must never have owned a home before, which is different from never having bought one.
But there is good news for commercial property owners. If you've owned a shop or restaurant but never owned your own home, you'd still be considered a first time buyer.
How to compare first time buyer mortgage deals
Add your details
Tell us about yourself and an adviser will check your mortgage eligibility and affordability.
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We'll show you mortgage options based on what you've told us.
Apply via Mojo
Prepare and submit your mortgage application and get support through each step of the process.
Who is Mojo?
Mojo is a free online mortgage broker. We partner with them so you can get all the mortgage support you need in one place.
Mojo will find out about your circumstances, check your eligibility, and search across the whole of market to help you secure the best mortgage for you.
An expert will be on hand to offer help and advice and you will be supported through each step of your mortgage application.
How much can I borrow on a first time buyer mortgage?
In the past, lenders used to be willing to lend you about five times your household income. These days lenders are more cautious about how much they will lend you and take your affordability into account.
Some of the criteria banks and lenders use to calculate how much you can borrow include:
Your income
The deposit amount
Your regular outgoings
The amount of debt you already have
Your credit history
Some lenders also calculate your affordability using hypothetical scenarios such as sudden hikes in mortgage interest rates. This is known as stress testing.
To increase your borrowing potential, it's a good idea to start spending sensibly and reduce your outgoings where possible, ideally three to six months before you apply for a mortgage.
Calculate how much you can borrow with our first time buyer mortgage calculator.
What schemes are available to help first time buyers
Many first time buyers struggle to save enough to qualify for a mortgage. This is why the UK government has introduced various schemes to help people get on the property ladder and buy their first home. These include:
Help to Buy
Help to Buy is a first-time home-buyer government scheme that can help you get a mortgage with as little as a 5% deposit.
The scheme offers an equity loan, which means you borrow money to use towards your deposit and repay it later. You must repay the loan when you sell your home, and if the price of your home has risen, some of the increase may also be repayable.
Learn more about the Help to Buy first-time home-buyer government scheme.
Compare Help to Buy mortgages to find the right deal for you.
Shared ownership
Another government scheme is shared ownership. This lets you buy a share of your home's value, between 25% and 75%, and pay rent on the portion you don't own. You’ll buy a house with a smaller mortgage and will need a smaller deposit.
Lifetime ISA
If you're over 18 but under 40, you can open a Lifetime ISA (LISA). This is a first-time home-buyer government incentive to help you buy your first home and save for your future.
Under the rules, you can add £4,000 a year into your LISA until you're 50. The government adds a 25% bonus to the money you save, up to a maximum of £1,000 annually.
Be aware that you only get the extra government cash if the money is used to buy a first home or you wait until you are 60.
You can take out the money for other reasons if you need it, but you sacrifice the government top-up by doing so.
First time buyer mortgage rates explained
When comparing first time buyer mortgages, you’ll be able to choose either a fixed rate deal or a variable rate deal:
Fixed-rate first time buyer mortgages
With a fixed-rate mortgage, the interest rate is guaranteed to stay the same over a set period of time. This means your monthly payments will also remain the same, making it easier to budget. The downside is that the payments might be slightly higher than they would with the best variable mortgage.
Variable-rate first time buyer mortgages
With a variable mortgage, the interest rate can change. The monthly repayments are usually a bit cheaper than with a fixed-rate mortgage, but the downside is that if the interest rate goes up – usually after a rise in the Bank of England base rate - your repayments will also increase. If you’re considering a variable-rate mortgage, make sure you can afford for rates to rise.
Types of mortgages for first time buyers
Choosing the right type of mortgage as a first time buyer will depend on your financial circumstances. The main types you can choose from include:
Fixed-rate mortgages
The interest rate and your monthly repayments remain the same for the term of the mortgage.
Find out more about fixed-rate mortgages
Tracker mortgages
The interest rate (and your monthly repayments) can go up or down, usually in line with movements in the Bank of England base rate.
Find out more about tracker mortgages
Discount mortgages
The interest rate is usually a set percentage below your lender’s standard variable rate (SVR) which means it can go up or down.
Find out more about discount mortgages
Offset mortgages
This allows you to use your savings to reduce the amount of interest you pay on your mortgage (but no interest is paid on your savings).
Find out more about offset mortgages
How much of a deposit do I need for a first-time buyer mortgage?
When buying a home, the bigger your deposit, the better your first time buyer interest rate will be.
These days, you need to have a deposit of at least 5% of the property value to get a mortgage. This will result in a Loan to Value ratio (LTV) of 95%, which is the maximum that almost all lenders will accept.
For example, on a £150,000 property, this would mean a deposit of £7,500. You'd then get a mortgage for the remaining £142,500.
LTV is a measure of the percentage of the property price that you will need to borrow to make the purchase. Typically, most banks recommend an LTV of 80%.
In our comparison tables, you can find 95% mortgages for first home buyers from a wide range of lenders.
Other options for first time buyers
Choosing the right type of mortgage as a first time buyer will depend on your financial circumstances. The main types you can choose from include:
Joint mortgages
Buying a property with someone else will usually mean you’ll be able to raise a larger deposit, and your combined income will be higher than the amount you earn alone. This can make it easier to get accepted for a mortgage and increases the chances of getting offered a more competitive mortgage rate.
Find out more about how joint mortgages work
Guarantor mortgages
Some lenders offer guarantor mortgages, whereby a friend or family member promises to step in and meet the mortgage repayments if you’re unable to.
Getting your first home can be tough, especially juggling paperwork with estate agents, solicitors and lenders. Speaking to a free mortgage broker like our partners at Mojo can help smooth the process. ”Nisha Vaidya, Mortgage Editor
First time buyer mortgage FAQs
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The results shown are for illustrative purposes, as you may not be eligible for every deal shown.
Lenders consider your credit record and financial circumstances when they decide if they can offer you a mortgage.
Overall representative example
| Based on borrowing | £170,000 over 25 years | The overall cost of comparison | 4.28% APRC Representative |
|---|---|---|---|
| Initial rate | 2.87% fixed for 2 years (24 instalments of £820.17pm) | Subsequent rate (SVR) | 4.51% variable for the remaining 23 years (276 instalments of £931.10pm) |
| Lender fee | £528 | Total amount payable | £277,194.92 |
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