The First-Time Buyer Mortgage Guide

Buying a first home is a big milestone. Today, many young people reach it with help from their families. This guide is here to walk you through the mortgage process from start to finish so you can support your child or grandchild as they take their first step onto the property ladder.

We’ll cover each stage of the journey, including:

• How to work out what they can borrow
• How to apply for a mortgage
• How to find the best first-time buyer rates.

We’ll also explore ways you can help. This includes family support options like guarantor mortgages, income boost and deposit boost. Each one offers a practical way to make homeownership more achievable for the next generation.

What is a first-time buyer mortgage?

First-time buyer mortgages are designed to help people buy their first home. You’re considered a first-time buyer if you’ve never owned a property before and the home you’re buying will be your main residence.

Some lenders offer special deals to support first-time buyers. These can include:

• 95% mortgages, where you only need a 5% deposit
• Cashback or other incentives

It’s a good idea to shop around and compare offers to find a deal that suits your needs.

Getting a first mortgage

Helping your child or grandchild secure their first mortgage can feel like a big step. But understanding the process makes it much more manageable. Here’s a simple four-step guide to help them get started.

1. Work out how much they can borrow

Before your loved one begins their mortgage journey, it’s helpful to get a sense of how much they might be able to borrow. This will depend on things like their income, any existing financial commitments and the value of the property they’re interested in. You can get a rough idea using our mortgage calculator.

It’s also important to think about what’s affordable in the long run. Encourage them to look at their monthly income and outgoings to work out what they can comfortably manage in repayments – both now and in the future.

2. The deposit

Once you know how much they could borrow, the next step is to think about the deposit. Most lenders ask for at least 5% of the property’s value. But this can vary.

If they can afford to put down a larger deposit, it’s often a smart move. A bigger deposit means they’ll need to borrow less, which lowers their Loan-to-Value (LTV) ratio. A lower LTV can lead to better mortgage rates and a greater chance of being approved. This is because lenders see them as less of a risk.

3. Getting a Mortgage in Principle

After working out the deposit, the next step is to get a mortgage in principle (MIP). This is a statement from a lender showing how much they might be willing to lend. It’s based on a snapshot of their finances.

It’s not a formal offer, but it gives a clearer idea of their budget. It also shows sellers and estate agents that they’re serious about buying.

Want to know more? Check out our guide to how a mortgage in principle works.

4. Applying for the mortgage

Once they’ve got their MIP, they can begin the property search in full.

They’ll be ready to set up viewings and look for homes that suit their needs. When they find the right one and have an offer accepted, it’s time to apply for the mortgage. They can either do this with the same lender or a different one if a better deal is available.

This is also a good moment to weigh up the options. They should think about whether a fixed-rate or variable mortgage suits their situation best.

How to improve your mortgage eligibility

Getting approved for a first mortgage can feel tough, but a few easy steps can make a big difference. These tips can help show lenders that your loved one is responsible with money and ready to own a home:

• Check their credit score. Ask them to review their credit report and fix any mistakes early.
• Pay off existing debts. Lowering credit card balances or loans can help them look more affordable to lenders.
• Register on the electoral roll. Being registered at their current address helps lenders check their identity.
• Avoid new credit. Applying for new credit just before a mortgage can worry lenders.
• Save regularly. A steady saving habit shows good money management.

Getting the best mortgage rate at as first-time buyer

With a few smart moves, your loved one can boost their chances of getting a lower interest rate:

• Save a bigger deposit. The more money they can put down, the better the rate they’re likely to get.
• Check their credit early. A quick credit check can spot any problems. If there are issues, they’ll have time to fix them and improve their score.
• Pick the right mortgage. Each type of mortgage has its own pros and cons. Help them explore the options and choose one that fits their budget and future plans.

Do first-time buyers pay Stamp Duty?

If your loved one is buying their first home in England or Northern Ireland, they might not have to pay any Stamp Duty – as long as the property costs £300,000 or less.

Thanks to government support, first-time buyers get relief on the first £300,000 of the purchase price. If the home costs up to £500,000, they’ll only pay 5% on the part above £300,000.

Different tax rules apply in Scotland and Wales, and rules can be subject to change, so it's best to find out what the current rules are at the time of purchasing.

How can family support mortgages help first-time buyers?

Buying a first home is a big step – and it’s not always easy to do alone. That’s where family support mortgages can help. These are designed to give your children or grandchildren a helping hand onto the property ladder, by boosting their borrowing power with your support.

This kind of help is becoming more common. According to Savills , in 2024, over half of all first-time buyers in the UK – around 173,500 people – got financial support from family. On average, they received £55,572 to help with their purchase.

Types of family support mortgages

There are several ways you can help your children or grandchildren buy their first home. These family support mortgage options can make it easier for them to get on the property ladder:

• Guarantor mortgages – You put 10% of the property’s value into a special savings account. This acts as a deposit for your loved one, helping them secure a mortgage without needing their own deposit.
• Income boost – Up to three family members can be added to the mortgage to increase borrowing power. You’ll help cover the mortgage payments, but you won’t be listed as a co-owner of the home.
• Deposit boost – You can unlock equity from your own home to gift a deposit. This doesn’t make you a guarantor, but it does help your loved one afford a more expensive property or get a better mortgage rate.

Are guarantor mortgages suited to first-time buyers?

Guarantor mortgages can be a helpful option for some first-time buyers. If your loved one has a lower income, a smaller deposit or is looking at a home just outside their budget, having a guarantor could make all the difference.

If you choose to be a guarantor for a close family member – like your child or grandchild – you agree to cover the mortgage payments if they can’t. To do this, you’ll usually need to:

• Own a home or have a lot of equity in your property
• Have a strong credit history
• Show enough income to support the loan if needed.

Some lenders set an age limit for guarantors, often around 75 years old. So, it’s important to check the details before applying.

Can first-time buyers get buy-to-let mortgages?

First-time buyers can apply for buy-to-let mortgages, but it’s not always easy.

Some lenders don’t offer buy-to-let mortgages to first-time buyers at all. Others may have stricter rules, since new buyers are often seen as higher risk than experienced landlords.

Here are a few things to be aware of:

• Bigger deposits. You might need to put down more money than someone who already owns a home.
• Higher interest rates. Some lenders charge more in interest for first-time buyers taking out a buy-to-let mortgage.
• Fewer options. Not all lenders offer buy-to-let deals to first-time buyers. So, your options may be more limited.
• Guarantors. In some cases, a lender might ask for a guarantor. This is someone who agrees to cover the mortgage if you can’t.