How much deposit do you need?
Most first-time buyers need a deposit of at least 5% of the property price, though a larger deposit usually unlocks better interest rates. On a £250,000 home, 5% is £12,500 and 10% is £25,000. The bigger your deposit, the lower your loan-to-value (LTV) and often the cheaper your monthly repayments.
It is worth budgeting for other upfront costs too, such as valuation and legal fees, and stamp duty if it applies to you.
How much could you borrow?
Lenders typically lend around 4.5 times your annual income, though this varies. If you are buying with someone else, most lenders consider your combined income. Your outgoings, credit history and deposit all play a part.
Our affordability calculator gives you an instant, indicative figure to work with.
Getting mortgage-ready
- Check your credit report and correct any errors.
- Register on the electoral roll at your current address.
- Keep on top of existing credit commitments.
- Avoid taking on new debt in the months before you apply.
A mortgage in principle — a lender’s indication of what they might lend — can make your offer more attractive to sellers.
Support for first-time buyers
Depending on where you live and your circumstances, schemes such as shared ownership or savings products like the Lifetime ISA may help. The right option depends on your situation, which is exactly the kind of thing an adviser can talk through with you.
This guide is general information, not personal financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.