Getting on the property ladder is much easier if you know what help is available and where to find a mortgage. Here is everything you need to know about how to buy your first home.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Save a deposit, which is the amount you put towards buying your home yourself
Look into the schemes that help first buyers, explained below, to see if any suit you
Make sure you can afford a mortgage
Find a property
Find a mortgage using our first time buyer comparison table
You may be eligible for a mortgage if you are in permanent full time employment, have saved a deposit, and have a good credit rating. Lenders will also check:
How much you earn
If you can afford the mortgage repayments
Your regular outgoings
Your existing debts
The value of the property you want to buy
If you are applying on your own, or jointly
Yes, but you will need to earn enough money to cover the cost of your monthly mortgage payments.
It may also be harder to save up for a deposit, and you may not be able to borrow as much as you would if you applied for a joint mortgage with a partner, friend or family member.
Lenders consider it riskier to give you a mortgage as a first time buyer because you may have:
No experience holding a mortgage, which means the lender will not know how well you will keep up with repayments.
Less credit history if you are younger or have never held a mortgage before. This will give lenders less information when they check your credit record.
A smaller deposit saved to put towards the house purchase.
No equity in a property you own already to put towards the new mortgage.
A smaller deposit means your mortgage will have to cover more of the property's total price.
For example, if you saved £20,000 for a deposit on a £200,000 home, this would cover 10% of the cost. You would need a mortgage for the remaining £180,000, meaning its loan to value (LTV) is 90% of the purchase price.
However, fewer mortgages are available with a high LTV, and the deals you can get usually have higher interest rates and upfront fees.
You can get first time buyer mortgages with an LTV of up to 95%. There are some deals available with no deposit, including guarantor mortgages, which require a family member or friend to be named on them.
You can apply for most types of mortgage, but some are designed to accept first time buyers, even if you have a small deposit.
Some mortgages are only available for first time buyers and can come with high LTVs, meaning you would only need a deposit of 5% or 10%.
These allow you to buy a property with a small deposit, and some deals are available with an LTV of 100%, meaning you will not need a deposit at all.
A family member or friend will have to agree to be named on the mortgage and to cover your repayments if you miss them. They will have to guarantee the mortgage payments with either:
Their own property, which could be repossessed if you fell too far behind on your repayments
Their savings, which the lender will hold in a savings account until you have paid off a percentage of your mortgage
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 later.
They are interest free for five years and can cover 20% of the purchase price (40% in London). You will need to save a 5% deposit yourself.
The Forces Help to Buy scheme was introduced in 2014 to help members of the armed forces get on the property ladder. It lets you borrow up to 50% of your salary (with a maximum of £25,000) interest free to help you buy a home.
Find out more and if you are eligible on the GOV.UK website.
This lets you buy your council house if you have lived there for more than three years. You can get a discount of up to 70% off the price, and some mortgage lenders let you use this discount instead of a deposit.
You can use a Shared Ownership mortgage to buy between 25% and 75% of a property. You can buy further shares in your property until you own all of it.
These mortgages can come with much smaller repayments and deposits than if you buy 100% of a property. However, you will also pay rent to your local authority or a housing developer who own the rest of your home as well as your mortgage payments.
Some property developers offer loans if you buy a new home from them. They will often lend you enough for your mortgage's deposit.
If they lent you 20% of the purchase price over 15 years, you would need to save up to pay back their loan as well as make repayments on your mortgage.
You can buy or rent a home in London using the First Steps scheme. They offer a range of property types available through the following options:
Shared Ownership with a minimum share of 25%
Rent to save, which offers a discount on your rent while you save for a deposit
Discount full ownership, which offers a discount price on buying a property
You can find out more about the scheme, register and find a property on the First Steps website.
You can apply to buy shared equity in your home in Northern Ireland if you are a tenant of a housing association or the Northern Ireland Housing Executive (NIHE).
You can also buy property in Northern Ireland:
With a discount on the purchase
Using their Rent to Own scheme
Using their shared equity scheme
You can find out more on the nidirect website.
Check you can afford the following costs:
The monthly repayment on the mortgage
Any fees that come with it
You can work out if buying a house is in your budget using our guide on how much buying a property will cost you.
You should also think about getting an income protection policy, which pays you a monthly income if you were unable to work for a prolonged period of time.
If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs by comparing the best rates available.