Buying your first home should feel exciting, not overwhelming. This first- time home buyer guide gives you clear steps, simple tips, and straight answers—so you can move forward with confidence. At Stagg Mortgage Services, we keep things friendly, practical, and tailored to you.
You’ll learn how first-time buyer mortgages work, how much deposit you need, and how to compare mortgage deals for first-time buyers. We’ll also cover the First Homes scheme and other house-buying assistance, plus what counts as a first-time buyer—including when you’re considered a first-time buyer again in the UK after life changes.
Key Takeaways
- A first‑time buyer hasn’t previously owned a residential property and must meet certain criteria to qualify for schemes.
- You’ll usually need a deposit of at least 5–10% of the property price; larger deposits mean lower interest rates.
- The First Homes scheme offers a 30–50 % discount but has income and mortgage limits.
- Remember to budget for Stamp Duty, surveys and legal fees as well as your monthly payments.
Ready to begin? Use our free Agreement in Principle to see what you could borrow, then follow this guide for first-time home buyers to secure the right deal: at your pace, with expert support through everything.
Your First‑Time Home Buyer Guide
Welcome! If you’re preparing to buy your first home, We’re here to guide you through every step. Buying a house is exciting but can feel daunting. Together, we’ll break down the process into clear, manageable steps. I’ll explain complex terms in plain English and share tips to help you make informed decisions.
Who Is a First‑Time Buyer?
A first‑time buyer is someone who has never owned a residential property in the UK or overseas. Even if you’ve inherited a property or been a joint owner previously, you may not qualify as a first‑time buyer for government schemes. Some lenders might consider you a first‑time buyer again if you haven’t owned a property for several years, but eligibility for schemes is stricter.
Why Buy a Home?
Owning a home is both an emotional and financial decision. It gives you stability, allows you to personalise your space and can build wealth over time. Property values generally rise in the long term. Monthly mortgage payments can sometimes be similar to or lower than rent, depending on location and interest rates. However, homeownership comes with responsibilities and additional costs. Understanding these costs helps you decide if buying is right for you.
Saving for a Deposit
Most lenders require a deposit of at least 5 % of the property price. However, a deposit closer to 10 % or 15 % will secure better mortgage rates. A 40 % deposit often qualifies you for the very lowest rates. Here’s how to get there:
- Set a savings goal – Determine the price range of your desired property and calculate 10 % of that. Add a buffer for fees and moving costs.
- Open a dedicated savings account – Look for accounts with higher interest rates. If you’re under 40, consider a Lifetime ISA, which offers a 25 % government bonus on savings (up to £4,000 per year) to use for your first home.
- Automate savings – Set up a standing order to transfer money into your savings account each payday. This way you save without thinking.
- Cut back on non‑essentials – Small savings add up. Cancel unused subscriptions, cook at home more often and review your energy tariffs.
- Boost your income – Consider side hustles, overtime or selling unused items to increase your savings rate.
Money tip: Feel free to use a Mortgage Calculator to see how different deposit sizes affect monthly repayments.
Understanding LTV and Mortgage Types
Your deposit size affects your Loan‑to‑Value (LTV) ratio: the percentage of the property price you borrow. A £250,000 home with a £25,000 deposit results in a 90 % LTV. A lower LTV often leads to lower interest rates because the lender is taking on less risk.
There are two main ways to repay your mortgage:
- Repayment mortgages – You pay both capital and interest each month. By the end of the term, you owe nothing.
- Interest‑only mortgages – You pay only the interest each month and repay the capital at the end. Interest‑only mortgages are less common and usually require a plan to repay the capital (like investments).
When it comes to rates, you can choose fixed or variable:
- Fixed‑rate – Your interest rate stays the same for a set period. This provides certainty over your monthly payments.
- Variable‑rate – Your rate can go up or down with the base rate. If rates fall, you pay less; if rates rise, your payments increase.
Budgeting for Monthly Payments
Before applying for a mortgage, you need to prove you can afford the monthly payments. Lenders examine your income, outgoings, and any existing debts. Here’s how to prepare:
- List your income – Include all reliable income sources (salary, benefits, rental income).
- List your expenses – Mortgage payments, bills, groceries, travel, childcare, subscriptions and debts.
- Use calculators – Stagg’s Mortgage Affordability and Budget Planner tools show how much you could borrow and help you track spending.
- Check your credit – Make sure your credit file is accurate and address any issues. A higher credit score can increase your borrowing power.
- Plan for rising costs – Interest rates can change. Consider how much you could afford if rates rise by a percentage point or two.
Other Costs of Buying a Home
Beyond the deposit and mortgage payments, expect several additional costs:
- Stamp Duty or Land Tax – Tax on property purchases varies across the UK. First‑time buyers in England and Northern Ireland pay no Stamp Duty on homes up to £300,000 and 5 % on the portion between £300,001 and £500,000. In Scotland, the Land and Buildings Transaction Tax threshold is £175,000; in Wales, you pay no Land Transaction Tax on properties up to £225,000.
- Survey costs – Surveys help identify structural issues. Prices vary from £250 for a basic homebuyer report to £1,000 for a full structural survey.
- Solicitor or conveyancer fees – Legal costs usually range from £500 to £1,500 depending on the property price and complexity.
- Mortgage fees – Some lenders charge arrangement and valuation fees.
- Insurance – Buildings insurance is mandatory with most mortgages. Consider life and income protection to safeguard your home.
- Moving costs – Removal companies, storage and cleaning.
Freehold vs Leasehold
Freehold means you own the property and the land outright. Most houses are freehold. You’re responsible for maintaining the property and land but don’t pay ground rent.
Leasehold means you own the property for a fixed period, but not the land. Most flats are leasehold. You’ll pay ground rent and service charges for maintenance. Check the length of the lease; a short lease (under 80 years) can affect your mortgage options and resale value.
Government Schemes and Assistance
Several government schemes help first‑time buyers:
- First Homes scheme – Provides a 30–50 % discount on new‑build homes. Eligibility requires you to be over 18, a first‑time buyer, and you need a mortgage covering at least half of the purchase price. Income must be below £80,000 outside London or £90,000 in London.
- Mortgage Guarantee Scheme – Allows lenders to offer 95 % mortgages on homes up to £600,000, meaning you only need a 5 % deposit. Extended to 2025, it aims to help buyers who struggle with large deposits.
- Shared Ownership – You buy a share of a property (10–75 %) and pay rent on the rest. You can buy more shares over time, a process called “staircasing.”
- Help to Buy: Equity Loan – Closed to new applicants in England in 2023 but still available in Wales until 2025. The government lends you up to 20 % (40 % in London) of the property price for a new‑build.
- Lifetime ISA – Save up to £4,000 a year and receive a 25 % government bonus to put toward your first home or retirement.
Product tip: Contact Stagg Mortgage Services about the First Homes scheme. We can check your eligibility and guide you through the application.
How to Get a Mortgage
You can approach lenders directly or work with a regulated mortgage adviser. Advisers search the market to find suitable deals, explain terms and manage paperwork. When applying, you’ll need:
- Proof of identity (passport or driving licence).
- Proof of address (utility bills).
- Last three months’ payslips or accounts if self‑employed.
- Bank statements showing income and spending.
- Proof of deposit (savings statements or gifted deposit letters).
Lenders assess affordability using your income, expenses, credit history and deposit size. They’ll also “stress test” your ability to repay if rates rise. Once approved, they issue a mortgage offer, which your solicitor uses to complete the purchase.
Viewing Properties and Making Offers
When you start house hunting, visit several properties to compare. Don’t rush; buying a home is a major commitment. Look at the location, transport links, schools and amenities. Ask about maintenance issues, service charges and council tax bands.
When you find the right property, you’ll make an offer through the estate agent. In Scotland, the process differs slightly: you submit a “note of interest” through your solicitor and may take part in a blind bidding process. In England and Wales, offers are usually negotiable. Once your offer is accepted, the conveyancing process begins.
Surveys and Conveyancing
A survey identifies structural issues that could cost you money later. There are three main types:
- Condition report – A basic overview, ideal for new‑builds or modern homes.
- Homebuyer report – More detailed, highlighting issues that might affect value.
- Full structural survey – Comprehensive and recommended for older properties.
Your solicitor will handle legal checks, such as confirming the title, local searches (for planning issues and drainage) and drafting contracts. They’ll liaise with the seller’s solicitor and your lender.
Exchange and Completion
In England and Wales, once contracts are exchanged, you’re legally obligated to buy the property. You’ll pay your deposit at this stage. Completion follows a few days or weeks later. Your solicitor will arrange to transfer the remaining funds from your lender, and you’ll receive the keys to your new home.
In Scotland, the contract becomes binding earlier once offers are accepted and “missives” (contract letters) are exchanged.
After You Move In
Congratulations! As a new homeowner, remember to:
- Set up buildings and contents insurance.
- Notify utility providers and council tax.
- Check your mortgage payments start on the agreed date.
- Register to vote at your new address (it can impact your credit score).
- Budget for maintenance and repairs. Setting aside a small monthly amount can cover unexpected costs.
Product tip: Consider Stagg’s Personal Protection policies, including life insurance and income protection. These policies can ensure your mortgage is paid if you become ill or pass away.
Wrapping Up
Buying your first home is a big step, and preparation is key. Start by saving a deposit and understanding how much you can afford each month. Explore government schemes and ask about any extra help you might qualify for. Don’t forget to budget for Stamp Duty, surveys and other buying costs. With the right plan and advice, you’ll be ready to find a home that fits your needs and budget. Keep things simple, ask questions when you’re unsure, and enjoy the journey toward owning your first home.
Frequently Asked Questions
What age is the average first‑time buyer?
The average age has risen to the early thirties because of high property prices and the time needed to save a deposit. However, there’s no upper age limit. Lenders assess affordability and sometimes limit the term length based on retirement age.
How much interest do first‑time buyers pay?
First‑time buyer mortgage rates depend on your LTV, credit score and the type of mortgage. With a 10 % deposit, expect higher rates than someone with a 25 % deposit. Use comparison websites or speak to a mortgage adviser to see current rates.
When am I considered a first‑time buyer again?
If you’ve owned a home previously, most government schemes won’t consider you a first‑time buyer again. Some lenders may offer “first‑time buyer” deals if you’ve not owned property in recent years, but you won’t qualify for special tax relief.
Am I considered a first‑time buyer after divorce?
No. If you previously owned a home jointly, you’re not classed as a first‑time buyer when purchasing again. However, lenders might be sympathetic if your previous home sold as part of a divorce settlement.
What are first‑time buyer loans?
Many lenders offer mortgages marketed at first‑time buyers, often with lower fees and flexible criteria. Government schemes such as the Mortgage Guarantee Scheme also support buyers with small deposits.
Am I eligible for government schemes if I’m self‑employed?
Self‑employed buyers can apply for all schemes, provided they meet criteria. You’ll need at least two years of accounts or tax returns. Lenders assess your average profit and may require a larger deposit.
Can I buy with someone else?
Yes. Joint mortgages allow you to combine incomes. However, both parties are jointly responsible for repayments. If one person has a poorer credit history, it can affect the deal you get.
What happens if my mortgage application is declined?
Don’t panic. Ask the lender why. It could be due to credit issues, insufficient income or recent employment changes. Work with a broker to find alternative lenders and improve your application.
How long does the process take?
From mortgage application to completion, expect around eight to twelve weeks. Complex chains or legal issues can cause delays. Stay in close contact with your solicitor and mortgage adviser.
This guide is provided for informational purposes only and does not constitute financial advice. Always consult with a professional before making any financial decisions.
