How to Get a Mortgage as a First-Time Buyer in the UK

Buying your first home is a significant milestone, but it can also feel overwhelming, especially when it comes to securing a mortgage. A mortgage is a loan that allows you to borrow money to purchase a property, which you then repay over a set period, usually with interest. For first-time buyers in the UK, understanding the mortgage process is crucial to making informed decisions and finding the best deal for your circumstances.

As of June 2025, the UK housing market presents both opportunities and challenges for first-time buyers. With average house prices and mortgage rates fluctuating, it's important to stay informed about the latest trends and available schemes that can make homeownership more accessible. This comprehensive guide will walk you through the process of getting a mortgage as a first-time buyer in the UK, covering everything from saving for a deposit to understanding government schemes and choosing the right property.

Understanding Your Mortgage Options

When it comes to mortgages, there are several types to choose from, each with its own advantages and disadvantages. Here are the most common types:

The loan-to-value (LTV) ratio is another key factor. LTV is the amount you borrow compared to the property's value. For example, a £200,000 property with a £10,000 deposit has a 95% LTV. Lower LTVs (larger deposits) typically secure better interest rates, as they're less risky for lenders.

Saving for a Deposit

Saving for a deposit is often the biggest hurdle for first-time buyers. The average deposit in the UK is around £34,500, according to UK Finance. However, several strategies and schemes can help:

Lifetime ISAs (LISAs)

If you're aged 18-40, you can save up to £4,000 per year in a LISA, and the government adds a 25% bonus (up to £1,000 annually). The funds must be used for a first home worth up to £450,000. For example, saving £4,000 yearly from age 18 to 30 could yield £12,000 in bonuses.

Other Savings Strategies

• Regular Savings: Create a budget, cut non-essential expenses, and consider side hustles to boost savings.
• Family Support: Some buyers receive gifts or loans from family to cover part of the deposit.
• Low-Deposit Options: Some lenders, like Yorkshire Building Society, offer 99% LTV mortgages (e.g., £5,000 deposit), while Skipton's Track Record mortgage provides 100% lending for those with a strong rent payment history.

Government Schemes for First-Time Buyers

The UK government offers several schemes to help first-time buyers, making homeownership more accessible:

First Homes Scheme

This allows you to buy a new-build home at a 30-50% discount off the market price. Eligibility includes:

• Being a first-time buyer (never owned a property in the UK or abroad).
• Aged 18 or older.
• Household income not exceeding £80,000 (£90,000 in London).
• The property must be your main residence.
• Available only in England.

Mortgage Guarantee Scheme

Enables buyers to secure a mortgage with a 5% deposit, supporting 95% LTV deals. It's set to end on 30 June 2025, but the Labour government has proposed making it permanent as 'Freedom to Buy'. Larger deposits still yield better rates.

Shared Ownership

Buy a 25-75% share of a property, paying rent on the rest. You can 'staircase' to full ownership over time. This requires a smaller deposit but involves ongoing rent payments.

Step-by-Step Guide to Getting a Mortgage

Securing a mortgage involves several steps. Here's a clear roadmap:

1. Check Your Credit Score: Lenders assess your credit history to gauge reliability. Ensure your credit report is error-free and you're on the electoral roll. A strong credit score can secure better rates.
2. Get a Mortgage in Principle: This document from a lender estimates how much you can borrow based on your income and credit. It's not a guarantee but helps when making offers. Many estate agents require it.
3. Find a Property: Look for a home within your budget, considering location, property type, and lease terms (if applicable). Make an offer once you find the right property.
4. Apply for a Mortgage: Submit a full application to your chosen lender. They'll conduct affordability checks, reviewing your income, outgoings, and deposit size. Use an affordability calculator to estimate borrowing capacity.
5. Conveyancing: Hire a solicitor or conveyancer to handle legal work, such as checking title deeds and ensuring no legal issues. This typically costs £850-£1,500.
6. Exchange and Complete: After surveys and valuations, exchange contracts with the seller. Completion finalizes the purchase, and you become the homeowner.

Stamp Duty and Other Costs

First-time buyers in England and Northern Ireland benefit from Stamp Duty Land Tax (SDLT) relief. As of 1 April 2025, you pay:

• No SDLT on properties up to £300,000.
• 5% SDLT on the portion between £300,001 and £500,000.
• Standard rates for properties over £500,000.

For example, a £400,000 home incurs 5% SDLT on £100,000 (£5,000 total). Payment is due within 14 days of completion, often handled by your solicitor.

Other costs include:

Choosing the Right Property

Selecting the right property involves more than just price. Consider:

Leasehold vs Freehold

Freehold means you own the property and land outright. Leasehold (common for flats) means you own the property for a set period, with additional costs like ground rent and service charges. Check lease terms carefully.

Other Considerations

• Lease Length: For leasehold properties, ensure the lease has at least 80 years remaining. Shorter leases (under 70 years) can make selling or remortgaging difficult.
• Location: Evaluate proximity to schools, transport, and amenities. Consider future needs, like family growth.
• Property Type: Decide between a house, flat, or other property based on lifestyle and budget.

Current Market Conditions (June 2025)

As of June 2025, mortgage rates have stabilized but remain higher than a few years ago. According to Which?, average rates are:

• Two-Year Fixed: 5.10%
• Five-Year Fixed: 5.09%

However, better deals are available, especially for lower LTVs:

First-time buyers are taking out mortgages with an average term of 31 years to keep monthly payments affordable, compared to 28 years a decade ago. This reflects the challenge of high property prices, with the average UK house price at £293,200 in August 2024.

Conclusion

Getting a mortgage as a first-time buyer in the UK requires careful planning, from saving a deposit to navigating government schemes and choosing a property. Researching options, improving your credit score, and seeking professional advice can make the process smoother. While challenges like high house prices and interest rates persist, schemes like the First Homes and Mortgage Guarantee Schemes offer valuable support. Start early, explore all options, and take the first step toward homeownership with confidence.

Additional Resources

• Mortgage Calculator - Calculate your monthly payments
• Salary Calculator - Understand your take-home pay
• First Homes Scheme - Official government information
• MoneyHelper - Free financial guidance