A Guide to First-Time Buyer Mortgages

Mortgages can feel overwhelming for first-time buyers, but the good news is that support is available. In this guide, you'll discover everything you need to know about first-time buyer mortgages, including where to seek advice and how to compare rates at no cost.

Are there exclusive first-time buyer mortgages?

As a first-time buyer, you'll generally have access to the same range of mortgages as experienced homeowners, but some lenders offer exclusive rates, deals, and incentives for those in this group.

When seeking a mortgage as a first-time buyer, consider the following:

• You may qualify for a government scheme, such as First Homes.
• You are likely eligible for a stamp duty land tax discount.
• Mortgage brokers specialising in first-time buyers can offer tailored advice.

While dedicated first-time buyer mortgages are relatively rare, some lenders are better suited to meet the needs of this group. For example, not all lenders support applications through government schemes or accept borrowers requiring family support, such as those using a guarantor.

Who is classed as a first-time buyer?

You are considered a first-time buyer if you have never owned a home in the UK or overseas. However, if you have inherited a property, you will not qualify as a first-time buyer, even if you never lived in that property.

If you own or have owned a commercial property, such as a shop or café, but have never owned a residential home, you would still be classified as a first-time buyer.

You will not be eligible as a first-time buyer if you are purchasing a property with someone who has previously owned a home (in the case of a joint mortgage) or if they are buying it on your behalf.

What interest rate to expect as a first-time buyer

Mortgage rates for first-time buyers are typically the same as for other borrowers and are influenced by factors such as the size of your deposit (the larger, the better), the type of mortgage product you choose, and the overall strength of your application.

However, some lenders offer exclusive deals for first-time buyers, which may feature slightly lower rates and more flexible criteria.

Eligibility requirements

The requirements for a first-time buyer mortgage are as follows:

• Deposit: First-time buyers generally need at least 5% of the property’s purchase price for a deposit in most cases.
• Credit History: A clean credit history provides access to more mortgage options, but bad credit mortgages are available through specialist lenders, typically via mortgage brokers.
• Age: Obtaining a mortgage becomes more difficult if you are over 75 or will reach this age during the mortgage term. Specialist lenders may cater to older borrowers in these situations.
• Property Type: Purchasing a non-standard construction property (such as one not built from bricks and mortar) might require applying through a specialist lender to broaden your options.
• Employment: Self-employed first-time buyers with less than two years of accounts to verify income should seek specialist advice from a broker.

If you are applying for a mortgage through a government scheme, additional eligibility criteria will apply. See the next section for more information on this.

How much can you borrow?

Generally, most first-time buyers can borrow up to 4-4.5 times their annual income. However, if you earn a higher income (typically £50k or more per year) or have a larger deposit (around 15-20%), you may be able to borrow up to 5 times your salary or more.

First-time buyer mortgage schemes

The table below shows a range of different government schemes that first-time buyers can apply for to help them get a mortgage, along with the main criteria for each one.

Alternatives to consider

For first-time buyers who do not qualify for the mentioned schemes or prefer not to use them, there are alternative ways to secure a mortgage if you fall outside of standard criteria. Specialist lenders and brokers can assist with tailored solutions, such as bad credit mortgages, non-standard property loans, or options for those with irregular income or smaller deposits.

Guarantor Mortgages

Guarantor mortgages are typically available to first-time buyers and allow them to secure a mortgage with the financial backing of a family member. The guarantor, often a family member, must either secure the mortgage against a property they own and have equity in, or deposit a sufficient amount of savings into an account with the lender as security.

Joint Borrower Sole Proprietor Mortgages

Joint borrower sole proprietor mortgages are a popular choice for first-time buyers who may struggle to get a mortgage on their own. These agreements involve multiple applicants sharing responsibility for the mortgage repayments, but only one person is listed as the legal owner of the property.

A common arrangement sees parents named on the mortgage alongside their child, with the child being the sole legal owner and resident of the property.

How to get a first-time buyer mortgage

We recommend following the steps below to get a first-time buyer mortgage:

Know Your Options: Take time to explore all available government schemes and family support options, as these can often be the most suitable for first-time buyers. However, it's equally important to investigate options outside of these schemes to ensure you find the best mortgage solution for your circumstances.

Optimise Your Credit Reports: It’s recommended to ensure your credit reports are in the best shape possible before applying for a mortgage. You can access your reports for free on Checkmyfile. Look for any inaccuracies or outdated information and request their removal to strengthen your application and improve your mortgage options.

Get in touch: Speaking to a broker is the best way to boost your chances of landing the most favourable deal as a first-time buyer - let's discuss your options during a free, no-obligation chat today.

Which lenders offer first-time buyer mortgages?

The following mortgage lenders are known for offering exclusive deals tailored to first-time buyers:

• Nationwide: Offers 95% mortgages, support for affordable home ownership schemes, and the option to borrow up to 20% more through their 'Helping Hand' initiative.
• NatWest: Provides mortgages via the Mortgage Guarantee scheme and Shared Ownership.
• Barclays: Offers guarantor mortgages through their Family Springboard initiative and affordable options via the Shared Ownership scheme.
• Santander: Includes 95% mortgages, guarantor mortgages, and support for government schemes such as Shared Ownership.

This is just a small selection of the many lenders available to first-time buyers.

Frequently Asked Questions