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First Time Buyer Mortgages

We understand that buying your first home can be both exciting and daunting at the same time, and our friendly team of mortgage advisers are here to help guide you from start to completion.

first time buyer

Learn how to get your first mortgage

What is a first time buyer?

A first time buyer is usually someone who’s never owned a home before either in the UK or abroad. The property you’re buying also needs to be where you’ll live, rather than somewhere you’ll rent out or have as a second home.

Buying your first home is really exciting, but it can also be quite stressful. It’s a huge financial commitment and getting a mortgage is just one of many steps you’ll need to take before you can get your hands on the keys.

The most suitable mortgages for first time buyers should take into account more than the just interest rate.  The right mortgage should be based on all these things:

  • Monthly payment
  • Interest rate
  • Any fees
  • Remaining balance

You pay less interest on a mortgage the quicker you pay it off, which is why the remaining balance is so important.

Are There 90% and 95% Mortgages for First-Time Buyers?

The deposit against the mortgage is known as Loan to Value or LTV.  For example, if you put down a 40% deposit, you will have a 60% loan to value against the property.  In this instance, if the house’s value were £200,000 and you put down a deposit of £80,000, you would be looking at interest rates with an LTV of 60%, as you will be borrowing 60% of the value of the property.  95% Loan to Values aren’t typical, but they are possible with a whole-of-market broker such as Revolution.  Mortgages at 90% are usually more competitive, with lower rates, as the 10% deposit offsets a little more of the lender’s risk.

How Much Can I Borrow on a First-Time Buyer Mortgage?

When you apply for a mortgage, lenders determine how much they will lend based on your income and outgoings; thus, the more commitments you have each month, the less you can borrow.  Lenders will generally multiply your income by 4.5 to work out how much they are willing to lend.  If you have an income of £30,000, lenders will generally lend around £135,000 to you. However, mortgage providers will offset this amount against your monthly outgoings.

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Insurances for Your Mortgage

Your home is very important to you and keeping up with your mortgage repayments is vital.  When you take out a mortgage, it’s worth considering protection to ensure you can continue to make payments if something happens that you were not expecting.

You’ll get a better mortgage deal the more equity you have in your home. Equity is the value of your home minus how much you owe on your mortgage. Your home might have gone up or down in price since you bought it. Ask an estate agent to value your home or check a property website. This will give you a more accurate figure to use when you look for deals.

If you remortgage with your current lender, they may not check your credit history.  This would only be the case if you were not borrowing more or changing something important, like the length of your mortgage or the type.  Otherwise, a lender will look at your credit report.  Your credit report or file is a detailed record of your credit and debt history.  It includes things such as missed debt repayments, and how much credit card and loan debt you have.   Your credit report helps a lender decide whether to give you a mortgage.  It’s a good idea to look at your credit report before you remortgage.  If you apply and the lender turns you down it will affect your credit history.  This could make it harder to get a loan in the future.

You may have to pay an early repayment charge (ERC) if you remortgage before the end of your initial period.  This would be a percentage of your current mortgage balance. The amount is set out in the terms and conditions of your mortgage.

Speak to your lender if you do not know how much you’d have to pay. It may be a good idea to wait until your deal is about to end before you remortgage.

Types of Mortgages for First Time Buyers

First time buyers usually take out the same sort of mortgages as everyone else. Lenders often give first time buyers special deals, such as cashback and fee free mortgages. If you’re buying a home to live in, the main types of mortgages are:

With a fixed rate mortgage you know exactly how much you’ll pay every month and for how long. You can fix your mortgage from 2 to 15 years. It’s important to think about how long you want to fix your mortgage for.

With a fixed rate mortgage you can often overpay by 10% a year. If you overpay more than that, or pay back the full amount early, you may have to pay an early repayment charge (ERC). This can be expensive.

Variable rate mortgages include tracker mortgages and discounted variable rate mortgages. Their rates can change, which means your repayments can go up or down. Usually the rate is higher than the Bank of England’s interest rate.

These follow the Bank of England’s interest rate and are often a certain percentage above it.


Discounted variable rate mortgages link to the lender’s standard variable rate (SVR).

They have a discounted rate for a certain amount of time, usually between 2 or 5 years.

These mortgages usually have the lowest interest rates and smallest monthly repayments. But your interest rate and monthly repayments can go up or down at any time.

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