🏠 First-Time Buyer Calculator
📈 Your FTB Mortgage Results
Tip: Increasing your deposit to reach 85% LTV could unlock better interest rates.
📅 First Year Breakdown
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Results are estimates for illustration purposes. Actual rates depend on your credit profile and lender. Remember to budget for solicitor fees, surveys and other purchase costs.
🏠 First-Time Buyer Mortgages Explained
Buying your first home is one of the biggest financial decisions you will make. As a first-time buyer (FTB), you have access to special tax relief, government schemes and dedicated mortgage products designed to help you get on the property ladder. Here is what you need to know.
💰 How FTB Mortgages Work
A first-time buyer mortgage works the same way as a standard repayment mortgage — you borrow the difference between the property price and your deposit, then repay it over a set term (typically 25–35 years) with interest. Each monthly payment covers both interest and a portion of the capital, so the loan is fully paid off by the end of the term.
The key advantages for first-time buyers are stamp duty relief, access to government schemes, and dedicated FTB mortgage products that some lenders offer at competitive rates — sometimes with lower arrangement fees or free valuations.
🌱 Government Schemes for First-Time Buyers
Several government-backed schemes can help you buy your first home:
- Lifetime ISA (LISA): Save up to £4,000 per year and the government adds a 25% bonus (up to £1,000/year). You must be aged 18–39 to open one and the property must cost £450,000 or less. After saving for multiple years, you could accumulate a significant deposit boost.
- Shared Ownership: Buy a share of a property (25–75%) and pay rent on the rest. You only need a mortgage and deposit for the share you buy, making it far more affordable. You can buy additional shares over time (called “staircasing”). Household income must be under £80,000 (£90,000 in London).
- First Homes Scheme: New-build homes offered to local first-time buyers at a discount of 30–50% off the market price. The discount stays with the property for future sales, helping the next buyer too.
- Right to Buy: If you are a council or housing association tenant, you may be able to buy your home at a discount of up to £96,000 (£127,900 in London) depending on how long you have been a tenant.
📊 Understanding LTV Brackets
LTV (Loan-to-Value) is the mortgage amount as a percentage of the property price. Lower LTV means better rates:
- 95% LTV (5% deposit): The minimum most lenders accept. Rates are the highest. Some lenders offer 95% LTV products specifically for FTBs.
- 90% LTV (10% deposit): A significant step down in rates. This is the most common FTB bracket.
- 85% LTV (15% deposit): Noticeably better rates than 90%. A good target if you can stretch your deposit.
- 80% LTV (20% deposit): Opens up the widest range of competitive products.
- 75% LTV (25% deposit): Excellent rates available. Uncommon for FTBs but achievable with help or LISA savings.
- 60% LTV (40% deposit): The best rates on the market. Rare for first-time buyers unless purchasing a lower-value property.
💳 Affordability: How Much Can You Borrow?
Most UK lenders offer between 4 and 4.5 times your annual gross salary. Some specialist lenders may offer up to 5–5.5x for certain professions (doctors, lawyers, accountants) or higher earners. For joint applications, lenders typically use the combined income.
Beyond the salary multiple, lenders also stress-test your affordability by checking you could still afford payments if interest rates rose by 2–3%. They will also review your outgoings, debts, and credit score.
📝 What to Expect When Buying Your First Home
The FTB process typically takes 8–12 weeks from offer acceptance to completion. Here is a rough timeline:
- Step 1 — Mortgage in Principle: Get an agreement in principle (AIP) from a lender before you start viewing properties. This shows sellers and agents you are a serious buyer.
- Step 2 — Find a Property: Search within your budget (remember to account for stamp duty, fees and moving costs on top of the deposit).
- Step 3 — Make an Offer: Negotiate with the seller. Once accepted, instruct a solicitor and apply for the full mortgage.
- Step 4 — Survey & Valuation: Your lender will value the property. Consider getting your own survey (homebuyer report or full structural) for peace of mind.
- Step 5 — Exchange & Completion: Once searches are done and contracts exchanged, you pay the deposit. Completion typically follows 1–2 weeks later — you get the keys!
📝 Worked Examples
🏠 Starter Home — Single Buyer
👪 Joint Purchase — Couple
🌟 LISA Saver — Max Deposit
❓ Frequently Asked Questions
Most lenders require a minimum deposit of 5% for first-time buyers, though 10% or more will unlock significantly better interest rates. For example, on a £250,000 property, a 5% deposit is £12,500 and a 10% deposit is £25,000. Aim for at least 10% if possible, as you will move from 95% LTV to 90% LTV, which typically saves 0.3–0.5% on your interest rate.
First-time buyers in England and Northern Ireland pay no Stamp Duty Land Tax (SDLT) on the first £300,000 of a property priced up to £500,000. On the portion between £300,000 and £500,000, you pay 5%. If the property costs more than £500,000, FTB relief does not apply and you pay standard SDLT rates. On a £250,000 home, this saves you £2,500 compared to a non-FTB buyer.
Most lenders offer 4 to 4.5 times your annual gross salary. Some specialist lenders may go up to 5 or 5.5 times for higher earners or certain professions such as doctors, lawyers or accountants. For joint applicants, lenders typically use the combined income. For example, a single buyer earning £35,000 could borrow around £157,500, while a couple earning £60,000 combined could borrow up to £270,000.
A Lifetime ISA (LISA) lets you save up to £4,000 per year towards your first home, and the government adds a 25% bonus on top — that is up to £1,000 free per year. You must be aged 18–39 to open one, and the property must cost £450,000 or less. After saving for several years, the bonus can add up to a significant boost to your deposit.
Shared ownership lets you buy a share of a property (between 25% and 75%) and pay rent on the remaining share. You only need a mortgage and deposit for the share you buy, making it more affordable. You can buy additional shares over time (called staircasing). To qualify, your household income must generally be under £80,000 (£90,000 in London) and you must be a first-time buyer or a previous homeowner who cannot afford to buy now.
Beyond the deposit, first-time buyers should budget for: solicitor and conveyancing fees (£1,000–£1,800), survey and valuation fees (£250–£700), mortgage arrangement fees (£0–£2,000), local authority searches (£250–£400), removal costs (£300–£1,500), and building and contents insurance. In total, expect £2,000–£5,000 in additional costs on top of your deposit and any stamp duty.