First time home buyer

In this guide, we’ll explain what's involved with arranging your first mortgage and how to increase your chances of getting one.

Bear in mind
Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Any savings will vary depending on personal circumstances.

How do you get your first mortgage?

If you're preparing to buy your first home, then congratulations on reaching a huge personal milestone.

Buying a home is exciting for anyone, but all the more so for first time buyers as they get their feet on the property ladder and look forward to having a place they can really call their own.

But alongside all that excitement, it's natural to be nervous about the responsibilities of home ownership and getting a mortgage for the first time.

So what are the main things you need to think about?

A deposit

You’ll need to provide a deposit to get your first mortgage. This will depend on the mortgage deal you choose, but lenders will typically require a minimum deposit of 5%. The larger the deposit, the more competitive the options that will be available to you.

How do you calculate the deposit that you’ll need?

Start by aiming for 10% of the value of a typical property that you expect to be able to afford, or alternatively find out how much you could afford by using Trussle’s online affordability calculator.

There are also some schemes that can help first time buyers (we’ve listed some of these further down), so it makes sense to be as well informed as possible.

You’ll need to appoint a licensed conveyancer or solicitor to carry out the legal aspects of the home purchase, such as arranging the contract. It’s important that you do this after you’ve received a mortgage recommendation from your broker or lender, as they need to be specifically approved on the chosen mortgage lender’s panel.

Insurance

You’ll need to buy home insurance from the moment that your new property becomes yours.

You may have had contents insurance in the past, but now you’ll need buildings insurance in order to protect the home itself. You can get home insurance from reputable mortgage brokers who can access the most competitive deals.

Your mortgage

Your mortgage broker will recommend a suitable mortgage deal that matches the amount of deposit you can afford to pay upfront. They should also inform you of deals you might be able to qualify for should you be able to contribute a slightly larger deposit. If you secure a Mortgage in Principle from Trussle, we’ll show you how much you could afford to borrow based on your income, outgoings, financial commitments, and the amount you’ve saved up for a deposit.

One you’ve exchanged on your home, you’ll transfer the deposit via your solicitor, who will liaise with the seller and lender. After completion, you’ll make an initial mortgage payment and then subsequent payments on the dates advised by the lender. Your first payment may be slightly higher than your normal payment depending on when you complete.

The application process

When you apply for a mortgage, you’ll need to provide information about your finances and the properly to your broker or lender. It helps to have your paperwork organised to make this process as smooth as possible.

Examples of the items that you may need to provide include:

  • Proof of ID
  • Proof of address
  • Proof of income
  • Bank statements
  • Proof of deposit

If you choose Trussle as your mortgage broker, we’ll notify you of the required documents you’re likely to need in advance to help you progress your application as quickly as possible.

Affordable housing schemes

There are a range of schemes that exist to help first time buyers to get onto the housing ladder, including:

  • Help to Buy equity loan
  • Help to Buy ISA
  • Shared Ownership

With shared ownership schemes, you buy a proportion of your new home and rent the rest - increasing your ownership over time as you wish.

Mortgage options available to a first time home buyer

There are different types of mortgages available to first time buyers. Some of these will have special features and incentives designed specifically for first time buyers, such as cashback and fee-free mortgage products.

Mortgage types to consider include:

  • Fixed rate
  • Tracker
  • Discounted variable rate

How do different mortgage types work?

Fixed rate mortgage

With a fixed rate mortgage, you'll know exactly how much you'll pay every month and for a fixed period of time. This could be anything from two to 10 years. You'll need to think about how long you want the security of your fixed rate deal for, remembering that these types of mortgages often allow up to 10% overpayments a year, repaying the full amount may incur an Early Repayment Charge, and that interest rates are typically higher (although they offer peace of mind for the fixed rate period).

Variable rate mortgage

With a variable rate mortgage such as a tracker or discounted variable rate, the interest rate will be determined by the lender - generally tracking above the Bank of England’s interest rate.

Tracker mortgages

Tracker mortgages usually link and track the Bank of England interest rate, generally a percentage point or two above it.

Discounted variable rate

Discounted variable rate mortgages are linked to the lender's Standard Variable Rate (SVR) and will offer a discounted, variable rate for a promotional period.

What issues must a first time home buyer consider?

As a first time buyer, some of the issues that you should consider include:

  • The amount of deposit you can afford
  • Which lenders will give you a mortgage
  • What type of mortgage is most suitable for you
  • Whether an affordable first time home-buyer scheme could be suitable for your needs
  • What additional costs you may need to pay such as legal costs, the cost of moving, and furnishing your new home, etc.

It’s also vital that you find the right help from professional, reputable sources, including your legal work and in finding the most suitable mortgage deal with a reputable mortgage broker.

The process can be complex, depending on your circumstances, so it’s well worth doing your research and groundwork first so that you can be confident about buying your first home and avoid any pitfalls.

Find the right mortgage deal for you

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Bear in mind
Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Any savings will vary depending on personal circumstances.