Buying your first home in the UK is exciting, but the mortgage process can feel confusing. Between deposits, credit checks, affordability tests and legal fees, there is a lot to understand before you apply.
This step-by-step guide walks you through the whole process, from checking how much you can borrow to getting the keys.
How Much Can a First-Time Buyer Borrow?
Most UK lenders will lend around 4 to 4.5 times your annual income. Some lenders stretch to 5.5 times for higher earners or certain professions, such as doctors and solicitors.
Example: If you earn £35,000 a year, you could typically borrow about £140,000 to £157,500. If you are buying with a partner and your combined income is £70,000, that could rise to £280,000 to £315,000.
Lenders also run an affordability check, looking at your monthly outgoings, debts, and how you would cope if interest rates rose.
Step 1: Check Your Credit Report
Your credit history strongly affects which mortgage deals you can access. Before applying:
- Get your free report from Experian, Equifax, or TransUnion.
- Check for errors and fix them.
- Make sure you are on the electoral register at your current address.
- Pay bills on time and reduce credit card balances.
- Avoid applying for new credit in the months before your mortgage application.
Step 2: Save Your Deposit
Most lenders require a deposit of at least 5% of the property price, though 10% or more gets you better interest rates.
| Property Price | 5% Deposit | 10% Deposit | 15% Deposit |
|---|---|---|---|
| £200,000 | £10,000 | £20,000 | £30,000 |
| £250,000 | £12,500 | £25,000 | £37,500 |
| £300,000 | £15,000 | £30,000 | £45,000 |
Ways to boost your deposit:
- Lifetime ISA (LISA): Save up to £4,000 a year and get a 25% government bonus (up to £1,000 a year). You must be aged 18 to 39 to open one, and the property must cost £450,000 or less.
- Gifted deposit: Family can gift you money, but lenders will ask for a gift letter.
- Cash ISA or high-interest savings account: Useful for shorter-term saving.
Step 3: Budget for All the Extra Costs
The deposit is not your only cost. Also plan for:
- Solicitor or conveyancer fees: Around £1,000 to £2,000
- Survey costs: £400 to £1,500 depending on the type
- Mortgage arrangement fees: £0 to £2,000
- Valuation fee: Sometimes free, sometimes several hundred pounds
- Removal costs and moving expenses
- Stamp Duty Land Tax (SDLT): First-time buyers get relief in England and Northern Ireland, but the thresholds have changed recently. Check the current rules on GOV.UK. Scotland (LBTT) and Wales (LTT) have their own systems.
Step 4: Understand the Types of Mortgage
Fixed-rate mortgage: Your interest rate stays the same for a set period, usually 2, 3, 5 or 10 years. This gives you predictable payments.
Tracker mortgage: Your rate follows the Bank of England base rate plus a set percentage. Payments can go up or down.
Standard variable rate (SVR): The lender’s default rate after your deal ends. It is usually more expensive, so most people remortgage before this happens.
Repayment vs interest-only: Almost all first-time buyers choose a repayment mortgage, where you pay off both interest and capital so you own the home outright at the end of the term.
Step 5: Consider First-Time Buyer Schemes
- Lifetime ISA: Government bonus toward your first home.
- Shared Ownership: Buy a share (usually 10% to 75%) and pay rent on the rest.
- Mortgage Guarantee Scheme: Helps buyers with small deposits (5%) access mortgages.
- First Homes Scheme: Discounted new-build homes for eligible buyers (availability varies).
- Help to Buy ISA: Closed to new applicants, but existing holders can still use theirs.
Eligibility and availability change often, so check the current details on GOV.UK.
Step 6: Get a Mortgage in Principle (MIP)
A Mortgage in Principle (also called an Agreement in Principle) is a document from a lender showing how much they are willing to lend you. It is not a guaranteed offer, but estate agents and sellers take you more seriously with one.
- Usually takes minutes to a few days
- Often involves only a soft credit check, but confirm with the lender first
- Typically valid for 60 to 90 days
Step 7: Choose a Mortgage Broker or Go Direct
You have two main options:
| Option | Pros | Cons |
|---|---|---|
| Mortgage broker | Access to the whole market, expert advice, helps with complex cases | May charge a fee |
| Direct to lender | No broker fee, simple for straightforward cases | Only see that lender’s products |
Many first-time buyers use a broker because they can compare hundreds of deals and find lenders suited to their circumstances.
Step 7: Find a Property and Make an Offer
Once your offer is accepted, the seller takes the property off the market (though in England and Wales, either side can still withdraw until contracts are exchanged).
Step 8: Make Your Full Mortgage Application
Now you formally apply. You will usually need:
- Proof of ID (passport or driving licence)
- Proof of address
- Payslips (last 3 months)
- Bank statements (last 3 months)
- P60 or tax returns if self-employed (typically 2 to 3 years)
- Details of your deposit and its source
- Details of any debts or regular commitments
The lender will then arrange a valuation of the property to confirm it is worth what you have agreed to pay.
Step 9: Get a Survey and Instruct a Solicitor
- Survey: Choose a Level 1, 2 or 3 survey depending on the property’s age and condition. Older homes benefit from a fuller survey.
- Solicitor or conveyancer: They handle the legal work, including searches, contracts and transferring ownership.
Step 10: Receive Your Mortgage Offer
If the lender is happy with the valuation and your finances, they issue a formal mortgage offer. Read it carefully, including the interest rate, term, fees and early repayment charges.
Step 11: Exchange Contracts and Complete
- Exchange of contracts: The sale becomes legally binding. You pay your deposit.
- Completion: The remaining money is transferred and you get the keys.
The whole process typically takes 8 to 16 weeks from offer to completion, though it can be quicker or slower.
Common Reasons Mortgage Applications Get Rejected
- Poor or thin credit history
- Missed payments or defaults
- Unstable or short-term income
- Too much existing debt
- Not being on the electoral register
- Deposit that cannot be verified
If you are refused, ask why, work on the issue, and consider speaking to a broker who specialises in tricky cases.
Tips for First-Time Buyers
- Start preparing at least 6 months before applying.
- Avoid big purchases or new credit before your application.
- Keep a buffer for rate rises and unexpected costs.
- Compare the overall cost of a deal, including fees, not just the headline interest rate.
- Consider the length of the fixed period. Longer fixes give certainty, but early repayment charges can be high.
Frequently Asked Questions
How much deposit do I need for a first-time buyer mortgage?
Usually a minimum of 5%, though 10% or more gives access to better rates.
Can I get a mortgage with bad credit?
Yes, through specialist lenders, but expect higher rates and possibly a larger deposit.
Can I get a mortgage if I am self-employed?
Yes. Most lenders want 2 to 3 years of accounts or tax returns.
How long does it take to get a mortgage?
The application itself can take 2 to 6 weeks. The full buying process usually takes 2 to 4 months.
Should I use a mortgage broker?
It is not required, but a broker can save time and often find better deals.
Final Thoughts
Getting a mortgage as a first-time buyer becomes much easier when you break it into clear steps. Check your credit, save the biggest deposit you can, get a Mortgage in Principle, compare deals, and work with a broker if you want expert guidance. Do your homework and the process becomes far less stressful.
Disclaimer: This article is for general information only and is not financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage. Speak to a qualified mortgage adviser about your circumstances.