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 walks through the deposit you need, the government schemes worth knowing about, how mortgages work, and the buying process from offer to completion.
Buying your first home in the UK is a big moment, and it arrives with a pile of unfamiliar words and paperwork that can feel overwhelming at first. As a first-time buyer you need to work out how much deposit you actually need, get your head around government-backed schemes such as Shared Ownership and the Lifetime ISA, and learn what lenders want to see. People who already own a home worked all this out long ago; you are doing it now. Lenders build plenty of products specifically for people taking their first step onto the property ladder, and once you understand how the pieces fit together, the process is far smoother than it looks from the outside.
This guide follows the first-time buyer journey from start to finish. You will see how much deposit you realistically need in today’s market, which government schemes are still open, the mortgage types you are likely to meet, what lenders check when they weigh up your affordability, and how the buying process runs one step at a time. Near the end we point out the mistakes first-time buyers make most often, so the costly ones are easier to avoid.
Maybe you are only just starting to save, maybe you are already out viewing properties, or maybe you are ready to send off an application. Wherever you are, there is something here for your stage. And when you want advice built around your own situation, the specialist mortgage advisers at Clearview compare deals from over 90 lenders to find the one that suits your circumstances.
How much deposit do you need?
Most first-time buyers need at least 5% of the purchase price as a deposit, and it is usually the biggest upfront cost of buying a home. Put down 5% and you are borrowing the other 95%, which lenders call a 95% loan-to-value mortgage (loan-to-value, or LTV, is the size of your loan set against what the property is worth). On a £250,000 home, 5% comes to £12,500. The more you can add to that, the lower the interest rate a lender will offer you, and the smaller your monthly repayments.
In practice, most first-time buyers land somewhere between 5% and 15%, depending on how long they have been saving and what homes cost where they are buying. Reach 10% and noticeably better deals open up. Get to 15% or 20% and you are into one of the most favourable LTV bands a lender offers. A calculator is the quickest way to see how each extra bit of deposit changes what you pay each month.
Most first-time buyers need at least 5% of the purchase price as a deposit, and it is usually the biggest upfront cost of buying a home. Put down 5% and you are borrowing the other 95%, which lenders call a 95% loan-to-value mortgage (loan-to-value, or LTV, is the size of your loan set against what the property is worth). On a £250,000 home, 5% comes to £12,500. The more you can add to that, the lower the interest rate a lender will offer you, and the smaller your monthly repayments.
In practice, most first-time buyers land somewhere between 5% and 15%, depending on how long they have been saving and what homes cost where they are buying. Reach 10% and noticeably better deals open up. Get to 15% or 20% and you are into one of the most favourable LTV bands a lender offers. A calculator is the quickest way to see how each extra bit of deposit changes what you pay each month.
Deposit benchmarks
Government schemes for first-time buyers
The UK government runs a handful of schemes to help first-time buyers onto the property ladder. The original Help to Buy equity loan closed to new applicants in March 2023, but several useful options are still open.
The Lifetime ISA, or LISA, lets you put away up to £4,000 a year towards a first home, and the government tops it up with a 25% bonus, worth up to £1,000 each year. You can use the money on a property costing up to £450,000. To open one you need to be aged 18 to 39, and you have to buy with a mortgage rather than cash.
Shared Ownership lets you buy a share of a home, usually between 25% and 75%, and pay rent to a housing association on the rest. Because your deposit is worked out on the share you buy rather than the whole property, the amount you need up front drops a long way. Later on you can buy further shares, a process called staircasing, until you own the place outright.
The First Homes scheme sells new-build homes to local first-time buyers at a discount of at least 30% off the market price. That discount stays attached to the property every time it is sold, so the next first-time buyer benefits too.
The UK government runs a handful of schemes to help first-time buyers onto the property ladder. The original Help to Buy equity loan closed to new applicants in March 2023, but several are still open. Our government schemes guide goes through each one in more detail.
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 to 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% to 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
Picking the right kind of mortgage matters as much as picking the right property. As a first-time buyer you will mostly come across three: fixed-rate, tracker, and variable-rate mortgages, and each one balances risk and cost differently.
A fixed-rate mortgage locks your interest rate for a set period, usually two or five years. Whatever the Bank of England base rate does in that time, your monthly payment does not move, which makes budgeting simple. This is the option most first-time buyers go for.
A tracker mortgage follows the Bank of England base rate plus a fixed margin on top. When the base rate drops, your payments drop with it; when it climbs, your payments climb too. Trackers can start out cheaper than a fixed rate, but you carry the risk of that rate moving.
The standard variable rate, or SVR, is the lender’s default rate, and you usually roll onto it once your fixed or tracker deal ends. An SVR is nearly always dearer, which is why most people remortgage before their initial deal runs out.
Picking the right kind of mortgage matters as much as picking the right property. As a first-time buyer you will mostly come across fixed-rate, tracker, and variable-rate mortgages, and each one balances risk and cost differently.
Fixed rate vs Tracker
| Fixed Rate | Tracker Rate |
|---|---|
| Predictable monthly payments for two to five 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 lets you remortgage again sooner, while a five-year fix buys you longer security on your rate. If you want certainty and expect to stay put, a five-year fix often suits first-time buyers well, particularly when rates are rising.
What lenders look at: affordability and eligibility
A deposit alone will not get you a mortgage. Lenders run a careful affordability check to satisfy themselves that you can manage the repayments comfortably, both at today’s rates and if rates go up later.
As a rule, most UK lenders will lend between 4 and 4.5 times your gross annual income, and a few specialist lenders stretch to 5 or even 6 times for higher earners. On a £35,000 salary, 4 to 4.5 times works out at roughly £140,000 to £157,500.
Income is only the start. A lender also weighs up your monthly outgoings, any existing debts such as credit cards, loans and car finance, your credit history, your employment status, and how long you have been in your current job. On top of that they stress-test the application against higher rates, checking you could still keep up if borrowing got more expensive.
A deposit alone will not get you a mortgage. Lenders run a careful affordability check to satisfy themselves that you can manage the repayments comfortably, both now and if interest rates climb in the future.
As a rule, most UK lenders will lend between 4 and 4.5 times your gross annual income, and a few specialist lenders stretch to 5 or even 6 times for higher earners. On a £35,000 salary, that comes to roughly £140,000 to £157,500. Our borrowing guide works through the detail.
What lenders assess
- 01
Income verification
Payslips (usually 3 months), P60s, and bank statements. Self-employed applicants need 2 to 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% to 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 runs through several stages, from sorting your finances to the day the sale completes. Here is what to expect at each one.
Buying your first home runs through several stages, from sorting your finances to the day the sale completes. Our guide to first-time buyer mortgages covers the whole process, and here is a quick overview of each step.
From saving to keys in hand
- 01
1. Get a mortgage agreement in principle (AIP)
Before you start viewing, get an AIP from a lender or broker. It is a conditional offer setting out how much you could borrow, and it lasts 60 to 90 days. Estate agents tend to take you more seriously once you have one.
- 02
2. Find your property and make an offer
Look on Rightmove, Zoopla or OnTheMarket, then put in an offer through the estate agent once you find the right place. Many first-time buyers open 5% to 10% below the asking price and negotiate from there.
- 03
3. Submit your full mortgage application
With your offer accepted, your broker sends the full application in with all your documents. The lender then arranges a valuation to confirm the property is worth what you agreed to pay.
- 04
4. Instruct a solicitor for conveyancing
Your solicitor takes care of the legal work: local authority searches, checking the title, drafting contracts and handling the exchange. Set aside £1,000 to £1,500 for conveyancing.
- 05
5. Exchange contracts and complete
On exchange you hand over your deposit and the sale becomes legally binding. Completion usually follows 1 to 4 weeks after that. It is the day the keys are yours and your mortgage money is released to the seller.
Common mistakes to avoid
A few slip-ups catch first-time buyers out again and again, and they can cost you time, money or the home you had set your heart on. These are the ones to watch for, and how to stay clear of them.
A few slip-ups catch first-time buyers out again and again, and they can cost you time, money or the home you wanted. Getting to grips with your loan-to-value ratio and your stamp duty liability early on heads off a lot of them.
Don’t forget the extra costs
Your deposit is not the only bill to plan for. Set money aside for stamp duty (first-time buyers pay nothing on the first £425,000 in England and Northern Ireland), solicitor fees of £1,000 to £1,500, a survey at £250 to £600, and the cost of moving your things. Plenty of buyers underestimate all this and end up short right when it matters most.
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 to 6 months before applying
- Close unused credit cards and make sure 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 to £600 now could save you thousands in unexpected repairs later
Going direct to your bank
- Your bank only offers its own products, while 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.
Frequently asked questions
- Regulator
- FCA register
- Updated
- 24 February 2026
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