Getting Your First Mortgage in the UK: The Complete First-Time Buyer’s Guide
This guide covers everything you need to know about getting your first mortgage — from improving your credit score to picking the right deal — so you can approach the process with confidence.
Buying your first home is a milestone moment — exciting, nerve-wracking, and sometimes overwhelming. For most people, it’s the largest purchase they’ll ever make, and the mortgage process can feel like a maze of jargon, paperwork, and decisions.
Whether you’re ready to start house hunting now or just planning ahead, understanding how mortgages work in the UK will put you in the strongest possible position.
1. Understanding What a Mortgage Is
A mortgage is a loan from a bank or building society to help you buy a property. You repay it over an agreed term — usually between 20 and 35 years — with interest.
Your monthly repayment has two parts:
- Capital – the original amount borrowed.
- Interest – the lender’s charge for lending you the money.
If you fail to make your repayments, the lender can repossess your home — so it’s vital to borrow only what you can realistically afford.
2. Check Your Credit Score Early
Lenders look closely at your credit history when deciding:
- Whether to lend to you at all.
- How much you can borrow.
- The interest rate you’ll be offered.
How to check your score
You can check your credit file for free with:
- Experian
- Equifax
- TransUnion
Some apps like ClearScore and Credit Karma also provide ongoing free access.
How to improve your credit score
- Register on the electoral roll at your current address.
- Pay all bills on time — even a single missed payment can hurt.
- Keep credit card usage below 30% of your limit.
- Avoid making too many credit applications in a short period.
Example:
If you have a £1,000 credit card limit, try to keep your balance below £300 for the best score impact.
3. Save for a Deposit
The deposit is the lump sum you pay towards the property price upfront. The bigger your deposit, the more mortgage deals you’ll have access to, and the lower your monthly repayments.
Typical UK deposit requirements for first-time buyers:
5% minimum: Possible through some lenders and government schemes.
10–15%: Often opens up better interest rates.
25%+: Usually gets the most competitive deals.
Example:
For a £250,000 property:
5% deposit = £12,500
10% deposit = £25,000
25% deposit = £62,500
Tip: If you’re struggling to save, look into the Lifetime ISA (LISA) — you can save up to £4,000 per year and get a 25% government bonus.
4. Understand the Different Types of Mortgages
Choosing the right mortgage type is as important as finding the right home.
Fixed-rate mortgage
Your interest rate stays the same for the fixed term (e.g., 2, 5, or 10 years).
Pro: Easier to budget, no surprise increases.
Con: Can’t benefit if interest rates drop.
Variable-rate mortgage
Your rate can change, either linked to the lender’s standard variable rate (SVR) or the Bank of England base rate.
Pro: Could pay less if rates fall.
Con: Risk of higher payments if rates rise.
Tracker mortgage
Directly tracks the Bank of England base rate plus a set margin.
Pro: Transparent link to base rate.
Con: Payments fluctuate with interest rates.
Tip for first-time buyers: Most choose a fixed rate for stability in their early years of homeownership.
5. Get a Mortgage Agreement in Principle (AIP)
An AIP (also called a Decision in Principle) is a document from a lender stating how much they could lend you based on a basic financial check.
Why it’s useful:
- Shows estate agents you’re a serious buyer.
- Helps you set a realistic budget.
- Speeds up the process once you find a home.
Note: An AIP usually lasts 60–90 days, and it’s not a full guarantee — final approval comes after a complete application.
6. Explore First-Time Buyer Government Schemes
Lifetime ISA (LISA)
- Save up to £4,000 a year.
- Get a 25% government bonus (up to £1,000 per year).
Must be used to buy your first home or for retirement.
Shared Ownership
- Buy a percentage of a property (25%–75%) and pay rent on the rest.
- You can increase your share over time (“staircasing”).
First Homes Scheme
- Newly built homes sold at a 30%–50% discount to local first-time buyers and key workers.
Mortgage Guarantee Scheme
- Enables lenders to offer 95% mortgages to buyers with smaller deposits.
7. Factor in All the Costs
Your deposit isn’t the only cost. Budget for:
- Mortgage arrangement fee: £0–£2,000 (some can be added to the loan).
- Valuation fee: £150–£1,500 depending on property value.
- Solicitor/conveyancing fees: £500–£1,500.
- Survey costs: £300–£1,500 depending on detail.
- Removal costs: £300–£1,000.
- Stamp Duty: First-time buyers in England pay no stamp duty on properties up to £300,000.
8. Shop Around for the Best Deal
Don’t just go to your bank — use:
- Independent mortgage brokers (often have access to exclusive deals).
- Comparison websites (for a general overview).
When comparing deals, look beyond the interest rate:
- Is there an arrangement fee?
- Can you make overpayments without penalties?
- What happens when the fixed term ends?
9. Avoid Common Pitfalls
- Overstretching your budget — Lenders may offer more than you can comfortably afford. Always stress-test your budget for potential interest rate rises.
- Ignoring your credit score — Even small mistakes can cost you better rates.
- Not getting a survey — Skipping a homebuyer’s survey could leave you with unexpected repair bills.
- Relying solely on online calculators — They give rough estimates but don’t reflect your full financial situation.
10. Step-by-Step: From Offer to Keys
- Get an AIP.
- Find your property and make an offer.
- Apply for the mortgage in full.
- Lender carries out a valuation.
- Receive formal mortgage offer.
- Solicitor completes legal checks.
- Exchange contracts (legally binding).
- Completion day — you get your keys!
Final Thoughts
Getting your first mortgage in the UK is a big step, but with preparation, it doesn’t have to be overwhelming.
Start early — build your credit score, save a solid deposit, and research the right mortgage type for your circumstances. Use government schemes if they fit your needs, and always seek professional advice before committing.
The key is to think long-term: your first mortgage is more than a loan — it’s the foundation for your future home and financial stability. If you would like award winning estate agents to help you throughout this new journey, give us a call on 0121 681 6327.