What Is a First-Time Buyer Mortgage?
A first-time buyer mortgage is a loan made specifically for people buying their first residential property. These mortgages often include special features like lower deposit requirements, better interest rates, and support from government-backed schemes to make homeownership achievable.
As a first-time buyer, you may also benefit from specific incentives such as reduced fees, flexible repayment terms, and additional guidance from lenders to help navigate the process.
Key Features of First-Time Buyer Mortgages
- Low Deposit Options
Many lenders let you start with a deposit as low as 5%, helping you step onto the property ladder sooner. A larger deposit, however, often means access to better interest rates and more favourable terms.
- Competitive Interest Rates
Lenders offer both fixed-rate and variable-rate mortgages to suit different financial needs. Fixed rates are ideal for predictable monthly payments, while variable rates might be more affordable if market rates decrease.
- Government Support
Schemes like the First Homes Scheme and 95% mortgages provide additional help to first-time buyers, reducing financial barriers and making it easier to secure a home.
- Stamp Duty Relief
First-time buyers often benefit from reduced or no stamp duty on properties up to a certain value, saving thousands of pounds in upfront costs.
Types of Mortgages for First-Time Buyers
When choosing a residential mortgage, understanding the options available is crucial. Here are the main types:
Fixed-Rate Mortgages
Fixed-rate mortgages are popular among first-time buyers who want stable, predictable monthly payments. These mortgages lock in your interest rate for a set period, usually 2–5 years.
Variable-Rate Mortgages
Variable-rate mortgages, such as tracker mortgages, align with market interest rates. While your monthly payments can fluctuate, they may offer savings if rates drop.
Shared Ownership Mortgages
For buyers with smaller deposits, shared ownership mortgages allow you to purchase a percentage of a property while paying rent on the remaining share. This reduces upfront costs and makes buying a home more affordable.
Help to Buy Mortgages
These mortgages work alongside government schemes, offering favourable terms to first-time buyers using Help to Buy equity loans.
Lifetime ISA Mortgages
If you’ve saved for a deposit using a Lifetime ISA, many lenders offer products tailored to maximise the government bonus you’ve earned.
How to Apply for a First-Time Buyer Mortgage
- Check Your Budget
Use a mortgage calculator to estimate how much you can afford. Don’t forget to factor in costs like legal fees, valuation fees, and moving expenses.
- Review Your Credit Score
A good credit score helps you secure better rates. Check your score regularly—this won’t affect your credit—and address any issues before applying.
- Get a Decision in Principle
A Decision in Principle (DIP) outlines how much a lender is likely to offer. This helps focus your property search on homes within your budget.
- Submit Your Application
Once you’ve found your dream home, gather documents like proof of ID, income, and savings. A mortgage broker can help streamline the application process.
Tips for First-Time Buyers
- Save with a Lifetime ISA
A Lifetime ISA allows you to save up to £4,000 per year for a deposit, with the government adding a 25% bonus. This can significantly boost your savings over time.
- Understand Mortgage Terms
Shorter mortgage terms reduce the total interest you’ll pay but come with higher monthly payments. Choose a term that suits your financial situation.
- Seek Expert Advice
Working with a mortgage broker can simplify the process. Brokers provide tailored advice and help you find the best mortgage for your needs.
- Plan for Additional Costs
Aside from your deposit, budget for expenses like survey fees, solicitor costs, and moving services.
Benefits of First-Time Buyer Mortgages
- Affordable Options: Low deposits and government schemes make homeownership accessible.
- Flexible Choices: Pick from fixed, variable, or shared ownership mortgages.
- Cost Savings: Enjoy reduced stamp duty and competitive interest rates.
- Peace of Mind: Fixed-rate mortgages offer financial stability, while variable rates provide flexibility.
FAQs About First-Time Buyer Mortgages
Can I get a mortgage with bad credit?
Yes, some lenders specialise in helping buyers with bad credit. You may need a larger deposit or face higher interest rates.
What’s the minimum deposit I need?
Many first-time buyer mortgages require just a 5% deposit, though saving more can unlock better deals.
Can I apply for a mortgage before finding a property?
Yes, securing a Decision in Principle lets you know how much you can borrow, helping you focus on homes within your budget.
What additional costs should I prepare for?
Expect to pay for valuation fees, legal fees, broker fees, and moving expenses.
Are fixed-rate or variable-rate mortgages better?
This depends on your financial goals. Fixed rates offer stability, while variable rates can save money if market rates fall.
Why Choose The Landlords Broker for First-Time Buyer Mortgages?
At The Landlords Broker, we understand the unique challenges first-time buyers face. Here’s how we help:
Expert Support
Clear guidance at every step.
Tailored Options
Find the perfect mortgage for your needs.
Wide Lender Network
Access competitive rates and terms.
Transparency
No surprises—just straightforward advice.
Start Your Journey Today
Ready to buy your first home? Contact The Landlords Broker to explore first-time buyer mortgages and take the first step toward homeownership. Our experts are here to make the process simple, smooth, and stress-free.