Is now a terrible time to buy a house?

Picking the right time to buy your first home helps you check it's affordable and get a good deal. But is now a good time to buy or are you better off waiting?

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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.

Are house prices going up faster than I can save?

Not necessarily. Average house prices in the UK increased by 1.1% in the year to February 2020, down from 1.5% in the year to January 2020. This is less than some savings accounts.

You can find the best savings accounts here

And remember: you don't need to save as fast as house prices rise. If house prices go up by £5,000 in the next year, you don't need to save an extra £5,000 just to keep up.

If you're aiming for a 10% deposit, you'd need to save an extra £500 to keep up with price rises. That's on top of saving the rest of your deposit so you're ready to buy in a year.

What about inflation?

When the overall cost of living goes up, house prices usually get more expensive too.

But inflation can cause wages to rise as well. If what you earn goes up but house prices don't, it could actually be easier for you to save a deposit.

Are interest rates low at the moment?

Yes, mortgage interest rates are currently low because the Bank of England base rate is just 0.1% at the moment.

This means they'll go up when the base rate rises again. But if you get a fixed rate mortgage, you'll be protected from any rate rises for a few years.

Should you get a fixed, tracker or variable rate mortgage?

Should I wait until after Brexit?

Some analysts think the economic shock could cause house prices to fall, meaning it could be cheaper to buy.

However, no one really knows what is going to happen to property prices or the value of the pound. It makes more sense to buy based on when you can afford to instead of basing your decision on something so unpredictable.

Can I even afford a mortgage?

You can only buy a house if you can afford the mortgage payments every month. This depends on:

  • How much you earn

  • Financial commitments like children or outstanding debts

Lenders look at both when they work out if you can afford the mortgage.

Check you can afford to buy a house and work out if lenders might accept you

What about my credit history?

Lenders also check your credit record, which is an electronic profile of when you've borrowed money before and how well you kept up with paying it back.

If you've taken out loans, overdrafts or credit cards in the past without any problems, you're more likely to be accepted.

If you've had debt problems or never borrowed money before, you should have a better chance of getting a mortgage once you've improved your credit record — here's how.

How much can I borrow?

You can get a good idea in a few seconds by putting your income into our calculator. We'll then give you an idea of how much lenders are likely to offer you.

Add this to how much you've managed to save for a deposit and that is the amount you could spend on buying a house.

I've saved a deposit, but is it enough?

You need a deposit of at least 5% of what the house costs to get a normal mortgage. On a house worth £200,000, that would be a £10,000 deposit.

If you save more than 5% you could find more mortgages that'll accept you. This means you should be able to find a cheaper deal too.

You also need to save up for solicitor fees, stamp duty, moving costs and more. Here are the other upfront costs when you buy a house.

Here is how deposits work and how much you need to save

Can't I just get a mortgage without a deposit?

Sort of. The only mortgages you can get without one are guarantor mortgages, but you'll need a family member or friend to help you.

They're named on your mortgage paperwork as the guarantor, which means they have to step in to make your mortgage payments for you if you can't.

If you fell too far behind, they could lose their own house or savings. But they can check out the risks for themselves here.

How to get a mortgage with no deposit

My family might not like that. How else can they help me?

They could put some money towards your deposit by:

  • Giving you the money as a gift

  • Loaning you money that you pay back every month

  • Loaning you some money they'll get back when you sell the house later

  • Raising money for your deposit by releasing equity from their own home

Ask them to read about all the ways they can help here

Can I afford more if I buy with someone else?

Getting a joint mortgage with your partner, family or with friends usually:

  • Improves your chances of getting a mortgage

  • Increases how much you can borrow

  • Makes the monthly payments more affordable

But you should only buy with someone you trust because getting out of the agreement can be complicated. Here are the pros and cons of a joint mortgage.

What about help from the government?

There's always the Help to Buy scheme. This gives you up to 20% of the house price as a loan towards your deposit (up to 40% in London). You need to save a 5% deposit yourself.

The loan is interest free for five years and can only be used for new build properties with maximum house prices imposed depending on which region you're buying in.

Here's everything you need to know about Help to Buy and how to use it.

How can I save a deposit quicker?

There are several ways, like:

Here's how to boost your deposit

Should I just rent instead?

Renting forever can work out much more expensive, but in the short term it might suit you better. Here's how to weigh up the pros and cons of buying a home now or renting.

You could even consider moving back in with your parents if they'll have you. That could give you the chance to save a mortgage deposit while (hopefully) paying much less in rent.

I want to buy now anyway. What type of mortgage shall I get?

Here is everything you need to know before you buy your first home, what mortgages you can get and where to find help.

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.