You can use this comparison to find mortgages that may accept first time buyers.

What mortgages can first time buyers get?

Buying your first home is an exciting time, and there are lots of great deals around to help you onto the housing ladder.

You can use our comparison tools to find a mortgage that offers the best rates and terms for your needs.

Before you start, you'll need to think about how much you have saved up as a deposit. Then you'll need to decide what sort of mortgage would be suitable for you.

What types of first time buyer mortgages are there?

For most people buying their first house or flat, the choice is between a home loan where the interest rate is guaranteed to stay the same over a set period of time, known as a fixed rate mortgage, or one that may change, known as a variable rate mortgage.

Should I get a fixed or variable mortgage?

The answer to this depends on how much financial security you require.

  • Variable rate mortgages are usually a little cheaper than fixed rate mortgages per month, but your interest rate can change - usually if the Bank of England base rate changes.

  • Fixed rate mortgages guarantee a fixed monthly repayment for a certain period of time, but the payments may be slightly higher than the best variable mortgage.

How does a variable rate mortgage work?

A variable rate mortgage is where the interest you pay on your home loan may go up or down depending on the Bank of England's base rate.

So if the Bank of England makes a decision to raise interest rates, and your lender decides to increase your mortgage interest rate as a consequence, then the monthly cost of your home loan will rise.

It can work the other way, too. If interest rates fall, your mortgage costs may also decrease.

How does a fixed fate mortgage work?

A fixed rate mortgage is where the interest you pay on your home loan stays the same over a set period of time.

This makes it a good option if you want to know how much you are going to be paying on your mortgage for a number of years. It can help you budget, and so a fixed rate mortgage is often a popular option for first time buyers.

How long should I fix my mortgage for?

The options are usually a two or three year fixed rate mortgage, a five year fixed rate mortgage, or a ten year fixed rate mortgage.

All these different mortgage options have pros and cons. Two and three year fixed rate mortgages are often very competitively priced, with comparatively low interest rates.

Ten year fixes tend to be more expensive than two or five year fixes when you first take them out, but the increased financial security may be important for you.

Whatever you choose, at the end of your fixed rate mortgage term your home loan will normally revert to the lender's standard variable rate (SVR). The SVR is normally a lot more expensive than your previous interest rate, so it's wise to consider remortgaging as soon as possible.

How much can I borrow for my first mortgage?

When you are apply for a mortgage, the lender will want to have a look in detail at your finances. They'll need to know how much you earn, and your monthly outgoings.

They will work out how much you can borrow on a mortgage based on your income. The total mortgage they offer you will be a maximum of five times your income. However, you may not be offered as much as this - each mortgage is assessed on an individual basis.

They will also look at your living costs, and what proportion of your income you spend each month.

How to find the best first time buyer mortgage for you

In general, the best first time buyer mortgage is one with the lowest interest rate and no fees.

You need to decide on the following points before you apply for a first mortgage:

In order to find the best first time buyer mortgage you can use our comparison tables.

When you look at the results, it will show you the interest rate you will pay and any costs such as arrangement fees. It will also state the maximum LTV available on that mortgage.

Some of the best deals are only available to people who have saved up 25% of the value of the home they want to buy. In the tables, this will show up as a maximum LTV of 75%.

Watch out for mortgages with low monthly repayments but high fees, especially if it's a short term fixed mortgage. The fees can really add up if you remortgage every couple of years.

First time buyer deposit

One of the hardest bits of getting your first mortgage is saving up a deposit, especially if you want to buy a house in an expensive part of the country.

Here are some common questions and tips for saving up a deposit for your first mortgage.

How much deposit do I need?

You generally need a deposit of at least 5% to get a mortgage.

For example, if a mortgage has an LTV of 95%, you will need a 5% deposit. On a 150,000 property, this would mean a deposit of 7,500 and a mortgage for 142,500.

You can find 95% mortgages for first time buyers from a wide range of lenders in our comparison tables.

Do I need a big deposit for a first time buyer mortgage?

How much deposit you have saved up will also have a big influence on the mortgage you are offered. The bigger the deposit, the better the deal you will receive. This is because the more money you can put into your home, the less risk it is for the lender.

The amount you need to borrow relative to the value of the property you want to buy is known as the loan to value ratio (LTV). Lenders express this as a percentage. So if you have a LTV of 95%, it means you only have a 5% deposit to put down.

How to save up a deposit

Saving a larger deposit should increase your chances of getting accepted for a mortgage and could help you get a cheaper deal.

It also increases the number of mortgages available to you. For example, a 10% deposit means you can get mortgages with an LTV of 90% or more, but a 15% deposit lets you get 85% LTV deals as well.

The best way to save for a deposit is to look at your monthly outgoings and see where you can economise. Reducing your spending will free up more spare cash that you can put into a savings account. It will also mean that when the lender looks at your finances and your bank statements they will be able to see that you are conservative with your spending.

Can I get a mortgage with no deposit?

If have not saved up a deposit, you may still be able to buy a house. Use our comparison tables to find lenders that accept buyers looking for a 100% mortgage.

Most mortgages need at least a 5% deposit, but some are available alongside government schemes to help you get on the property ladder.

Help to Buy

Help to Buy is a government scheme that can help you get a mortgage with a small deposit. They offer equity loans, which lend you money you can use towards your deposit and repay it later.

Shared ownership

The government also offers the Shared ownership scheme, which lets you buy a share of your home's value of between 25% and 75%. This means you can buy a house with a smaller mortgage, and thus a smaller deposit as well.

Help to Buy ISA

The government has a savings scheme for people buying their first home, known as a Help to Buy ISA. It's only available for first time buyers, and the Government will boost your savings by 25% up to a maximum of 3,000.

Lifetime ISA

If you are over 18 but under 40 you can make the most of a government incentive to help you buy your first home and save for your future.

You can open a Lifetime ISA (Individual Savings Account) and under the rules you can add 4,000 a year until you are 50. The government will add a 25% bonus to the money you saved, up a to maximum of 1,000 annually.

You can only get the 25% bonus from either the Help to Buy or Lifetime ISA, not both.

First time buyer mortgage FAQs

Q

Can I get an interest only mortgage?

A

It is very unlikely that you will be offered an interest only mortgage as a first time buyer. Most interest only mortgages are reserved for landlords with multiple properties.

Q

Do I need to save a deposit?

A

Most mortgages need at least a 5% deposit, but some are available alongside government schemes to help you get on the property ladder.

Q

Does my credit record matter?

A

Yes, it will show lenders if you can keep up with repayments on a mortgage. Here is why your credit record matters.

Q

Can I get a mortgage with someone else?

A

Yes, and getting a joint mortgage means you could borrow more and make the repayments easier to afford. Here is how joint mortgages work.

Q

Are 95% mortgages available to first time buyers?

A

Yes, some lenders offer mortgages to first time buyers with a 5% deposit. You can find these deals in this comparison.

Q

Can I afford a mortgage?

A

You can check if you can afford one by working out how much you earn and spend. Compare this to how much buying a home will cost you.

About our mortgage comparison

Q

Who do we include in this comparison?

A

We include mortgages from every lender in the UK. They are all from lenders regulated by the Financial Conduct Authority. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.