First-Time Buyer Mortgage

Podcast approved by The Openwork Partnership on 06/03/2026.

What are the typical requirements to apply for a mortgage as a first-time buyer?

Lenders look at a few things. They’re going to ask questions about your income, they’ll check your credit score and they will want to know how much you’ve got for a deposit. They’ll also be looking into how stable your job is.

It’s basically to see that you can afford the monthly payments now, with a bit of excess income to make sure it remains affordable for you in the future. Mortgage rates can go up and down, and monthly payments do the same – lenders want to see you’re able to weather any future storms.

Usually you’ll need to show payslips and bank statements, plus proof of your savings for the deposit. If you’re self-employed, they’ll want to see your accounts or tax returns instead.

What is the maximum amount that a first-time buyer can borrow for a mortgage?

The main reason people contact a broker is to find out how much they can borrow. The answer really depends on your situation, including your age and the term you’re looking for.

Most lenders will let you borrow roughly four to five times your annual income. If you earn about £40,000 a year, you might be able to borrow somewhere around £160,000 to £200,000. That acts as a maximum – it can go down depending on your age.

If we have to limit the term of the mortgage, from a 25 year to a 10 year mortgage, for example, the borrowing might go down. It will also depend on any debts you’ve got in the background and your credit score.

What’s the minimum deposit for a first-time buyer?

The minimum is usually 5% of the purchase price. If a house is costing £200,000, for example, you’ll need around a £10,000 deposit. It’s definitely in your interests to try and get a bigger deposit – because that will unlock better rates for you.

As you go through the life of your mortgage and your equity increases, better interest rates become available. If you can get to a 10%, 15% or even a 20% deposit, you’ll benefit from lower rates and therefore lower monthly payments.

What are the types of interest rates available on a mortgage for a first-time buyer?

The main choice people face is whether to fix the interest rate or look at a variable rate.

With a fixed rate, your payments are set for a certain period of time. It’s usually two, three or five years, although some lenders do have 10-year fixed rates available. It gives you stability, and makes planning and budgeting a lot easier.

With a variable rate, you’ve got more flexibility. Instead of being tied in for a period of time, you’ve usually got the option to get out without penalties. But the price you pay for that flexibility is that payments can go up and down, depending on what happens with interest rates in the wider economy.

What are the pros and cons of fixed versus variable interest rate mortgages for first-time buyers?

A fixed-rate mortgage gives you that peace of mind, to know exactly what’s coming out each month so you can plan and budget. But the downside is that if interest rates go down, you’re not going to benefit from those lower rates – your fixed rate will stay the same.

But conversely, if interest rates go up, you do benefit. Your interest rates and monthly payments are fixed so your payments stay the same.

With a variable-rate mortgage, on the other hand, if the rates go down, your payments go down. The disadvantage is that if interest rates rise, the payments go up as well. It can make things more unpredictable.

Most first-time buyers find that a daunting prospect. Having that stability in the early stages of a mortgage gives you a little bit more peace of mind, which is preferable for many people.

What government schemes are available to first-time buyers?

The government’s Help to Buy scheme was all over the papers five years ago – that’s now ended for new applicants as we speak today in October 2025. It is still relevant if you joined before it closed, though.

In replacement, they offer the First Home scheme, which offers discounts on new builds for local buyers and key workers. There’s still the Shared Ownership scheme, too, where you buy a percentage of a house. You might buy a 50% share, putting down a deposit based on that 50%. You take out a mortgage for that and pay rent on the remainder of the property.

You can then do what’s called ‘staircasing,’ to increase that percentage share up to 100% over time, hopefully as your income goes up.

A lot of people have the Lifetime ISA, which is a savings scheme. When you redeem it, the government will give you a 25% bonus on your savings.

Another good government scheme is Forces Help to Buy for members of the armed forces whereby, depending on the length of time that they’ve worked in the armed forces, they can get an interest-free loan from the MOD that’s paid back over 10 years.

It’s obviously better to borrow interest-free than to pay interest. But you have to take the monthly payments into account for that loan, which could factor into affordability as well.

What documents do I need to get pre-approved for a mortgage as a first-time buyer?

Preparation is key. One of the biggest causes of delays in mortgage applications is when people don’t have their documents all in a row.

The first thing you need is ID – a passport or a driving licence. Before you start applying for mortgages, make sure that your current address is on your driving licence – lenders won’t accept it otherwise. Get that updated if you need to, because it can take a couple of weeks to come through.

A licence can also work for proof of address. You’ll need recent payslips or accounts if you’re self-employed. Generally lenders ask for three months of payslips, but they may want to see P60s as well.

You’ll also need bank statements for three months for your current account, and also a savings account if your deposit money is coming from that. If your deposit is a gift, lenders generally ask for bank statements from the person who’s gifting you the money – and possibly a letter from them.

A broker would be able to help with that. If you’ve got all that in place, you’re ready to get a Mortgage in Principle organised.

What are the steps to follow when applying for a mortgage as a first-time buyer?

A lot of first-time buyers are quite nervous about this because they’ve never had to do it before. It’s quite a daunting process, but it’s fairly simple.

The first step is to speak to a broker or your bank to get an idea of your borrowing capacity. Check your credit score as well and think about your budget. Once you know how much you can borrow, that your credit score is okay and you have your deposit ready, you can get an Agreement in Principle from a lender.

Most lenders leave a soft search on your credit file for this – it doesn’t leave a hard footprint and there’s no impact on your credit rating. Essentially, it’s the lender looking at your file and calculating how much they are willing to lend you.

They then provide you with a certificate. You can take this to estate agents when viewing properties to show you’re ready to put an offer in. Once you’ve found a property, made your offer and it’s accepted, you contact your broker or bank to make a formal mortgage application.

Once that’s submitted, the lender will check all the information on the application form. They’ll request documents from you to support that and they also do a valuation of the property to make sure it’s suitable security for the loan.

Assuming that they’re happy with everything, they issue a formal mortgage offer to you, and a copy is sent to your broker and solicitors. It’s then in the hands of the solicitors to liaise with the vendor, sort out all the legal requirements and exchange contracts.

They request the money from the lender, ask you for your deposit, marry it all together and transfer it to the vendor’s solicitors. They register your name on the property title, and then you get a nice phone call from the estate agent about picking up the keys to your new home.