Residential mortgages:
When life changes
Buying your first home is an exciting step, but it brings plenty of unfamiliar decisions. Before you start viewing properties, it helps to understand how much you could borrow, what deposit you need and how much the purchase will cost beyond the asking price.
First-time buyers have very different circumstances. You may be buying alone or with someone else, using savings or receiving family help, earning a regular salary or working for yourself. The right mortgage should reflect your circumstances and leave you comfortable with the financial commitment you are taking on.
Understanding your options early gives you a clearer budget and helps you move forward with confidence when you find the right home.
Buying your first home
Your starting point is establishing a realistic purchase budget. This combines the deposit you can contribute with the mortgage you can obtain, while allowing for buying costs and money you want to keep in reserve.
It is worth speaking to a mortgage adviser before you begin seriously looking at properties. An initial conversation can help establish what is achievable, identify anything that needs preparation and explain how the buying process works.
Think about how the property will fit your life over the next few years. A change in employment, growing family or likely relocation may influence both the home you choose and the mortgage arrangements that suit you.
The property itself also affects mortgage options. A flat with a short lease, a home above commercial premises or a property requiring substantial work may need closer consideration. Checking potential issues early can prevent you spending time and money on a purchase that your intended lender cannot support.
Who counts as a first-time buyer?
A first-time buyer is generally someone who has never owned a residential property, but mortgage lenders, homeownership schemes and property-tax rules can use different definitions.
An inherited property, a share in another home or previous ownership abroad may affect eligibility. Buying with someone who has owned property before can also change the position.
Eligibility for a first-time buyer mortgage does not automatically mean you qualify for first-time buyer tax relief or a particular scheme. These should be checked separately.
Deposits
Your deposit is the money you contribute towards the purchase price. The mortgage covers the balance.
For example, a £300,000 purchase with a £30,000 deposit would require a £270,000 mortgage. The deposit represents 10% of the price and the mortgage represents 90%, known as 90% loan-to-value, or LTV.
Mortgages with a 5% deposit are available, subject to the lender’s criteria and the property. Some specialist arrangements may allow a smaller deposit or use family support in another form, but these have their own eligibility requirements.
A larger deposit can:
Reduce the amount you need to borrow
Give you access to a wider choice of mortgages
Improve the interest rates available
Reduce your monthly payments for an otherwise comparable mortgage
Mortgage pricing often changes at particular LTV bands. Increasing your deposit enough to move into a lower band may therefore make a meaningful difference, although this should be balanced against keeping sufficient savings available.
Where the deposit comes from
Deposits may come from savings, an inheritance, a family gift or other acceptable sources. The lender and solicitor will need evidence showing where the money originated, so keeping a clear record is important.
For a gifted deposit, the person providing the money will normally need to confirm that it is a gift, whether they expect repayment and whether they will have any interest in the property. A repayable family loan must be disclosed because it can affect both lender acceptance and affordability.
If you plan to use a Lifetime ISA or another savings scheme, check its eligibility requirements, withdrawal conditions and timescales before relying on those funds.
Family support and alternative purchase arrangements are explored further in our Help buying a home spotlight.
Understanding affordability
Your deposit determines how much of the price you can fund yourself. Affordability determines how much a lender is prepared to lend.
A salary multiple can provide a rough starting point, but each lender carries out its own more detailed assessment. They commonly consider:
Your income and how consistently it is earned
Loans, credit cards and other financial commitments
Dependants and childcare costs
Regular household expenditure
The mortgage term
The interest rate and their affordability assessment rules
Different lenders can reach different conclusions from the same information. One may accept more of your bonus or overtime, while another may take a more favourable approach to self-employed income or a recent change of job.
Being newly employed, self-employed or paid through a mixture of income sources does not automatically prevent you obtaining a mortgage. It makes choosing a lender whose approach fits your circumstances particularly important.
Our Complex income knowledge hub covers these topics in more detail.
What can you comfortably afford?
The maximum a lender will offer is not necessarily the amount you will feel comfortable borrowing.
Your own budget should allow for council tax, utilities, insurance, travel, food and other everyday spending, together with hobbies, recreation, saving for the future, and holidays, property maintenance and any service charges. It should also consider foreseeable changes, such as parental leave or increased childcare costs.
A longer repayment term generally reduces the monthly mortgage payment but increases the total interest paid if the mortgage runs for its full term. The term should therefore be considered alongside your current budget and longer-term plans.
If you already pay rent, this can be a useful starting point for thinking about a comfortable monthly commitment. However, a lender will still apply its own assessment, and homeownership brings costs that may currently be your landlord’s responsibility.
The application process
The mortgage application sits alongside the legal and practical work involved in buying a property. Understanding the main stages helps you know what to expect and what information will be needed.
Establishing your options
Your adviser will discuss your income, expenditure, deposit, credit history and plans. This helps establish a realistic borrowing range and identify suitable lenders and mortgage arrangements.
Documents commonly include identification, proof of address, recent bank statements, evidence of income and records showing the source of your deposit. Self-employed applicants or those with more complicated circumstances may need additional supporting information.
Obtaining an agreement in principle
An agreement in principle gives an initial indication of what a lender may be prepared to lend, based on the information supplied and its preliminary checks.
It can help demonstrate to an estate agent that you have explored your mortgage options, but it is not a guaranteed mortgage offer. The lender still needs to assess the full application and the property.
Making the full mortgage application
Once you have an offer accepted on a property, the mortgage application can usually be submitted with the property details and supporting documents.
The lender’s underwriter assesses the application and may ask for clarification or further evidence. Changes to your employment, borrowing or deposit arrangements during this period should be discussed with your adviser because they may affect the application.
Valuation and survey
The lender arranges a valuation to establish whether the property provides suitable security for the mortgage.
This is different from a survey commissioned for your own benefit. A lender’s valuation may involve only a limited inspection, or no physical visit, and should not be relied upon to identify defects or repairs.
A suitable survey can help you understand the property’s condition and any expenditure you may face after moving in.
Underwriting
Underwriting is the lender’s detailed assessment of your mortgage application. The underwriter reviews your income, expenditure, credit history and supporting documents, alongside the valuation, to decide whether the application meets the lender’s requirements. They may ask questions or request further evidence to clarify particular details; this is a normal part of the process and does not necessarily mean there is a problem. Your mortgage adviser helps explain your circumstances, respond to queries and keep the application moving towards an offer.
Mortgage offer and completion
Once the lender is satisfied, it issues a formal mortgage offer setting out the terms and any conditions.
Your solicitor or conveyancer handles the legal work, including searches, title checks and enquiries. The legal stages differ across the UK, but your adviser and solicitor can explain how the mortgage offer fits into the purchase timetable.
When the legal requirements and mortgage conditions have been met, the funds are released for completion and ownership passes to you.
Other costs
Your deposit is usually the largest upfront contribution, but it is not the only amount you need to budget for.
Solicitor’s fees and searches
Your solicitor or conveyancer charges for the legal work involved in the purchase. Their quotation should also explain additional costs such as searches, registration fees and bank-transfer charges.
Check what is included and whether extra charges apply to matters such as leasehold ownership, gifted deposits or a particular purchase scheme.
Surveys and valuations
A lender may include its valuation within the mortgage deal or charge separately. A survey for your own benefit is a separate consideration, with the cost depending on the property and level of inspection.
Mortgage and advice fees
Some mortgages carry a product or arrangement fee. A lower interest rate with a substantial fee is not always cheaper overall than a slightly higher rate without one. Some lenders also charge an upfront booking or application fee, which may be non-refundable even if the purchase does not proceed.
Certain lender fees can be added to the mortgage rather than paid upfront. This increases the borrowing and normally attracts interest.
Mortgage brokers may charge an advice or arrangement fee for their services. Your broker should explain the amount, when it becomes payable and any refund conditions clearly at the outset, so you can include it in your purchase budget.
Property-purchase taxes
The tax payable depends on where the property is located, its price and the buyers’ circumstances. England and Northern Ireland, Scotland and Wales have different systems.
First-time buyer relief may be available in some parts of the UK, subject to eligibility and price limits. Do not assume that buying your first home automatically means no tax is payable.
Use the government website to calculate your stamp duty liability.
Moving in and ongoing ownership
Removal costs, furniture, appliances and immediate repairs can quickly add up. Buildings insurance will normally be required under the mortgage terms, and your solicitor can confirm when cover should begin.
Once you own the property, you will also be responsible for maintenance. Leasehold properties may involve service charges, ground rent where applicable and contributions towards major works. These should be understood before committing to the purchase.
Keeping a financial buffer can make the first months in your new home considerably more comfortable.
Buying your first home becomes easier to navigate when the deposit, borrowing, costs and application process are considered together. Our role is to help you understand those moving parts, choose a mortgage that fits and feel informed at each stage.
It starts with a conversation.
Frequently asked questions.
Every client and every mortgage is different, but there are some questions we are asked regularly.
From affordability and deposits to complex income, expat mortgages and specialist property finance, our FAQs explain how different lenders may approach different circumstances.
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