First-Time Buyer Guide UK (2026) — Step by Step
Buying your first home is one of the biggest financial decisions you will ever make. This guide covers deposits, government schemes, mortgage types, and the step-by-step buying process.
Buying your first home in the UK is an exciting milestone, but the sheer volume of jargon, paperwork, and financial decisions involved can feel overwhelming. From understanding how much deposit you actually need to navigating government-backed schemes like Shared Ownership and the Lifetime ISA, first-time buyers face a unique set of challenges that experienced homeowners have long since figured out. The good news is that the mortgage market has a wide range of products specifically designed for people taking their first step onto the property ladder, and with the right guidance you can make the process far smoother than you might expect.
In this guide we walk you through the entire first-time buyer journey from start to finish. We cover how much deposit you realistically need in today’s market, which government schemes are still available and worth considering, the different mortgage types you’ll encounter, what lenders look for when assessing your affordability, and a clear step-by-step breakdown of the buying process itself. We also highlight the most common mistakes that first-time buyers make so you can avoid costly errors.
Whether you are just beginning to save, actively searching for a property, or ready to submit a mortgage application, this guide gives you the knowledge you need to approach each stage with confidence. If at any point you want personalised advice, our team of specialist mortgage advisers at Clearview can compare deals from over 90 lenders to find the best option for your circumstances.
How much deposit do you need?
The deposit is the single biggest upfront cost when buying a home. In the UK, the minimum deposit for most mortgage lenders is 5% of the property’s purchase price, which means a 95% loan-to-value (LTV) mortgage. On a £250,000 property, that works out at £12,500. However, the more you can put down, the better the interest rate you’ll be offered and the lower your monthly repayments will be.
Most first-time buyers aim for somewhere between 5% and 15% depending on their savings timeline and the local property market. Putting down 10% or more opens up significantly more competitive deals, and once you reach 15–20% you’ll be in one of the most favourable LTV bands available. It’s worth using a calculator to see how different deposit amounts change your monthly payments.
The deposit is the single biggest upfront cost when buying a home. In the UK, the minimum deposit for most mortgage lenders is 5% of the property’s purchase price, which means a 95% loan-to-value (LTV) mortgage. On a £250,000 property, that works out at £12,500. However, the more you can put down, the better the interest rate you’ll be offered and the lower your monthly repayments will be.
Most first-time buyers aim for somewhere between 5% and 15% depending on their savings timeline and the local property market. Putting down 10% or more opens up significantly more competitive deals, and once you reach 15–20% you’ll be in one of the most favourable LTV bands available. It’s worth using a calculator to see how different deposit amounts change your monthly payments.
Deposit benchmarks
Government schemes for first-time buyers
The UK government offers several schemes designed to help first-time buyers get on the property ladder. While the original Help to Buy equity loan scheme closed to new applicants in March 2023, other valuable options remain available.
The Lifetime ISA (LISA) lets you save up to £4,000 per year towards your first home, with the government adding a 25% bonus on top — that’s up to £1,000 of free money every year. You can use it to buy a property worth up to £450,000. You must be aged 18–39 to open one, and the property must be purchased with a mortgage.
Shared Ownership allows you to buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share. This dramatically reduces the deposit you need because you’re only putting down a percentage of the share you’re buying, not the full property value. Over time you can “staircase” up to full ownership.
The First Homes scheme offers newly built homes to local first-time buyers at a discount of at least 30% compared to the market price. The discount is passed on each time the property is sold, keeping it affordable for future first-time buyers.
The UK government offers several schemes designed to help first-time buyers get on the property ladder. While the original Help to Buy equity loan scheme closed to new applicants in March 2023, other valuable options remain available — see our government schemes guide.
Lifetime ISA (LISA)
- Save up to £4,000 per year with a 25% government bonus (up to £1,000 free per year)
- Property must be worth £450,000 or less and purchased with a mortgage
- Must be aged 18–39 to open; account must be open for 12 months before you can use it
- Penalty of 25% on withdrawals for non-qualifying purposes
Shared Ownership
- Buy a share of 25–75% and pay rent on the rest
- Deposit is based only on the share you buy (e.g. 5% of a 25% share)
- Available on new-build and resale properties through housing associations
- You can staircase up to 100% ownership over time
First Homes Scheme
- New-build homes sold at a minimum 30% discount to market value
- Price after discount must not exceed £250,000 (or £420,000 in London)
- Discount is locked into the property title and passed to future buyers
- Must be a first-time buyer and meet local eligibility criteria
Mortgage Guarantee Scheme
- Government backs lenders offering 95% LTV mortgages, increasing availability
- Available on properties up to £600,000
- Not a direct buyer scheme — it encourages lenders to offer higher-LTV products
- You apply for a 95% mortgage as normal; the guarantee operates behind the scenes
Mortgage types explained
Choosing the right mortgage type is just as important as finding the right property. As a first-time buyer you will typically encounter fixed-rate, tracker, and variable-rate mortgages, each with different risk and reward profiles.
Fixed-rate mortgages lock your interest rate for a set period, usually two or five years. Your monthly payments stay the same regardless of what happens to the Bank of England base rate, making budgeting straightforward. These are by far the most popular choice for first-time buyers.
Tracker mortgages follow the Bank of England base rate plus a set margin. If the base rate falls, your payments go down; if it rises, your payments go up. They can be cheaper than fixed rates initially but carry more risk.
Standard variable rate (SVR) mortgages are the lender’s default rate, which you typically move onto after your fixed or tracker deal ends. SVRs are almost always more expensive, which is why most borrowers remortgage before their initial deal expires.
Choosing the right mortgage type is just as important as finding the right property. As a first-time buyer you will typically encounter fixed-rate, tracker, and variable-rate mortgages, each with different risk and reward profiles.
Fixed rate vs Tracker
| Fixed Rate | Tracker Rate |
|---|---|
| Predictable monthly payments for 2–5 years | Rate moves with the Bank of England base rate |
| Protection against interest rate rises | Payments could increase at any time |
| Easier to budget around | Harder to budget if rates are volatile |
| Most popular choice for first-time buyers | Can be cheaper initially but carries more risk |
Which term length?
A two-year fix gives you flexibility to remortgage sooner, while a five-year fix offers longer-term security. If you value certainty and plan to stay in the property, a five-year fix is often the better choice for first-time buyers — especially in a rising rate environment.
What lenders look at: affordability and eligibility
Getting a mortgage is not just about having a deposit. Lenders carry out detailed affordability assessments to make sure you can comfortably afford repayments, both now and if interest rates rise in the future.
Most UK lenders will offer between 4 and 4.5 times your annual gross income, though some specialist lenders go up to 5 or even 6 times for higher earners. On a salary of £35,000, that typically means borrowing between £140,000 and £157,500.
Beyond income, lenders will look at your monthly outgoings, existing debts (credit cards, loans, car finance), your credit history, employment status, and how long you have been in your current role. They will also stress-test your application against higher interest rates to ensure you could still afford payments if rates increase.
Getting a mortgage is not just about having a deposit. Lenders carry out detailed affordability assessments to make sure you can comfortably afford repayments, both now and if interest rates rise in the future.
Most UK lenders will offer between 4 and 4.5 times your annual gross income, though some specialist lenders go up to 5 or even 6 times for higher earners. On a salary of £35,000, that typically means borrowing between £140,000 and £157,500 — see our borrowing guide for more detail.
What lenders assess
- 01
Income verification
Payslips (usually 3 months), P60s, and bank statements. Self-employed applicants need 2–3 years of accounts or SA302 tax calculations.
- 02
Credit check
Your credit file is checked for missed payments, defaults, CCJs, and overall credit utilisation. A clean history and low existing debt improves your score.
- 03
Outgoings and commitments
Regular spending on childcare, travel, subscriptions, and existing loan or credit card payments are all factored into how much you can afford.
- 04
Stress testing
Lenders model what would happen if interest rates rose by 2–3%. You must be able to afford repayments at the stressed rate, not just the initial rate.
The step-by-step buying process
Buying your first home involves several stages, from getting your finances in order to completing the purchase. Here is a clear overview of what to expect at each step.
Buying your first home involves several stages, from getting your finances in order to completing the purchase. Our guide to first-time buyer mortgages covers the full process, but here is a clear overview of what to expect at each step.
From saving to keys in hand
- 01
1. Get a mortgage agreement in principle (AIP)
Before house hunting, get an AIP from a lender or broker. This is a conditional offer showing how much you could borrow, valid for 60–90 days. Estate agents take you more seriously with an AIP in hand.
- 02
2. Find your property and make an offer
Search on Rightmove, Zoopla, or OnTheMarket. Once you find a property, make an offer through the estate agent. Most first-time buyers offer 5–10% below the asking price as a starting point for negotiation.
- 03
3. Submit your full mortgage application
Once your offer is accepted, your broker submits a full application with all supporting documents. The lender will arrange a property valuation to confirm it is worth the agreed price.
- 04
4. Instruct a solicitor for conveyancing
Your solicitor handles the legal side: local authority searches, checking the title, drafting contracts, and managing the exchange. Budget £1,000–£1,500 for conveyancing fees.
- 05
5. Exchange contracts and complete
At exchange, you pay your deposit and the sale becomes legally binding. Completion usually follows 1–4 weeks later — this is the day you get your keys and the mortgage funds are released to the seller.
Common mistakes to avoid
First-time buyers often make avoidable mistakes that can cost them time, money, or even their dream home. Here are the most common pitfalls and how to steer clear of them.
First-time buyers often make avoidable mistakes that can cost them time, money, or even their dream home. Understanding your loan-to-value ratio and stamp duty liability early on can help you avoid the most common pitfalls.
Don’t forget the extra costs
Your deposit is not the only upfront cost. Budget for stamp duty (first-time buyers pay nothing on the first £425,000 in England and Northern Ireland), solicitor fees (£1,000–£1,500), surveys (£250–£600), and removal costs. Many buyers underestimate these and run short at the worst possible time.
Stretching your budget too far
- Just because a lender will lend you a certain amount does not mean you should borrow it all
- Leave room in your budget for unexpected costs, maintenance, and lifestyle
- Consider how a future rate increase would affect your payments
Not checking your credit file early
- Errors on your credit report can delay or block your application
- Check your file on Experian, Equifax, or TransUnion at least 3–6 months before applying
- Close unused credit cards and ensure you are on the electoral roll
Skipping the survey
- The lender’s valuation is not a survey — it only confirms the property is worth the price
- A homebuyer’s survey or full building survey can reveal costly defects
- Spending £300–£600 now could save you thousands in unexpected repairs later
Going direct to your bank
- Your bank only offers its own products — a broker compares the whole market
- Brokers can access exclusive deals not available on the high street
- A good broker also handles the paperwork and chases the lender on your behalf
Know what you’ll pay
Related guides
- What Is Loan-to-Value (LTV)?
Understand how your deposit size affects your LTV ratio and the mortgage rates available to you.
- Mortgage Rates Explained
Fixed, tracker, or variable — learn how each rate type works before choosing your first mortgage.
- How Much Can I Borrow?
Find out exactly how much UK lenders will offer based on your income and outgoings.
- Getting Started with a Mortgage Broker
Why using a broker instead of going direct to your bank gives you access to better deals.
- Regulator
- FCA register
- Updated
- 24 February 2026
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