Mortgage Tips for First-time Home Buyers in the UK

Mortgage Tips for First-time Home Buyers in the UK


Buying a house for the first time in the UK (and anywhere else for that matter) can be challenging when you don’t know where to start. To ensure everything goes on according to plan, you need to be equipped with important information from; how to get your finances in order, how to find a suitable mortgage loan, the process of applying for a mortgage among other important information.

Getting your finances together: How much deposit do you need?

To get a mortgage, you need to have a deposit. Mortgages in the UK require a deposit of 5 to 20% of the total cost of the home in question. You can raise your deposit in many ways. One of the best ways is saving. Since mortgages are loans, you need to avoid borrowing the initial deposit to avoid increasing your debt levels. It’s also important to save as much as you can to be able to access the best mortgage rates in the market since a higher deposit translates to a better interest rate. You can also negotiate for better terms when you have a good deposit.

Make sure you can meet your repayment obligations

Raising a deposit is the first step to securing a mortgage. You also need to consider the repayment obligations of the mortgage you take. When you’re buying a home for the first time, you need to make sure you can afford to make the repayments comfortably. Although mortgage lenders perform stress tests to assess a borrower’s ability to repay their mortgage comfortably, you need to perform your own assessments considering your monthly living expenses, your planned retirement date, emergency expenses, etc.

Consider costs associated with buying a home

You also need to consider other costs associated with mortgages. Over and above your mortgage deposit and monthly repayments, you will be required to pay stamp duty or land/building tax in Scotland on the property/home you are buying. You will also be required to pay mortgage valuation and arrangement fees, solicitor’s fee, removal costs, survey costs, initial furnishing costs, insurance costs i.e. payment protection insurance, etc. These costs can easily add up to a significant amount, so you need to have some money left after you pay your deposit and first monthly repayment.

Understand the different types of mortgages in the UK

As a first time home buyer, it’s also important to note that there are different types of mortgages. The two major types are fixed and variable rate mortgages. As the name suggests, fixed rate mortgages have a fixed interest rate while variable rate mortgages have a variable interest rate. Both mortgage types have pros and cons so it’s important to understand each type so that you can be able to choose the best mortgage type for yourself. Fixed rate mortgages protect you from interest rate fluctuations. However, the mortgages tend to have a higher rate. Also, you don’t get lower repayments when the interest rate falls. Variable rate mortgages feature lower interest rates when the interest rate falls. The interest rate on the mortgage, however, rises when the interest rate rises. The interest rate on the mortgage can also change at any time making it hard to budget.

Consider affordable home buyer schemes in the UK

The UK has government-backed home buyer schemes that are perfect for first-time home buyers. For instance, you can use Equity loans that allow first-time home buyers in the UK to borrow 20% of the total cost of a home interest-free for 5 years provided you raise a 5% deposit. First time home buyers in London are eligible to borrow up to 40%. The scheme lasts until 2021. You can also consider the Starter Home Scheme which has made 200,000 newly built homes in the UK available to first time home buyers aged below 40 years. Under the new scheme, home buyers are only required to raise 20% of the cost of a home as the deposit.


The information discussed above is adequate enough to guide you on the perfect path to home ownership in the UK as a first-time home buyer. As long as you get your deposit, ensure you can meet your repayment obligations, consider additional costs of home ownership, understand the best type of mortgage for yourself, you should expect to have a seamless first-time home buying experience. Furthermore, you can always consider home buyer schemes to increase affordability.

Mark Scott

Is the Company Director of Swift Money Limited. He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.