Anderson Reed Financial Services logo Anderson Reed Financial Services
First-time buyer receiving the keys to their new home

First-Time Buyer Mortgage Advice

Clear guidance for your first mortgage and the steps that come with buying a home.

First-home guidance

Your first mortgage, explained clearly

A first-time buyer mortgage is a residential loan secured against a property for individuals purchasing their first home, typically designed to accommodate lower deposit thresholds alongside government homeownership schemes. Buying your first home involves understanding what you can borrow, how your deposit affects available interest rates, which buying costs to budget for, and what happens from offer through to legal completion.

Anderson Reed Financial Services can help you prepare for those decisions. We will look at your income, regular commitments, deposit and wider circumstances, explain the options that may be available and help you understand the next appropriate step. Any mortgage recommendation will depend on a full assessment of your circumstances and the lender's criteria.

Take the next step

Talk through your first mortgage Explore our mortgage calculators

Affordability and deposit

Start with a budget you can live with

The amount a lender may be prepared to lend is only one part of an affordable budget. It is also important to consider the monthly payment alongside Council Tax, energy, water, broadband, travel, insurance, maintenance and the other costs of running a home.

Mortgage affordability assessments normally consider income, committed expenditure, credit commitments, the proposed mortgage term and how payments could be affected if interest rates change. Different lenders assess circumstances in different ways, so an online estimate should be treated as a starting point rather than a lending decision.

Before viewing properties, build a budget that leaves room for the costs of buying and an appropriate financial buffer after completion. Buying at the top of an estimated borrowing range may not be the right choice for your circumstances.

How your deposit and loan-to-value fit together

Your deposit is the part of the purchase price that you provide yourself. The remaining amount is normally funded by the mortgage. Loan-to-value, usually shortened to LTV, expresses the mortgage as a percentage of the property's value or purchase price, subject to the lender's valuation.

A larger deposit can reduce the LTV and may widen the mortgage options available, but rates, product availability and acceptance still depend on lender criteria and individual circumstances. There is no universal deposit percentage that suits every buyer — while 5% and 10% deposits are common starting points, the right amount depends on your savings, monthly budget and lender criteria.

Estimate a comfortable monthly payment

Buying with a small deposit (5% deposits and 95% LTV)

Many UK mortgage lenders provide 95% loan-to-value mortgages, allowing first-time buyers with a 5% deposit to get onto the property ladder. When applying with a lower deposit, several key factors apply:

  • Credit scoring requirements: Lenders typically apply stricter credit score thresholds on 95% LTV products than on lower LTV bands.
  • Affordability stress testing: Monthly repayment commitments and living expenses are assessed against higher interest rate stress tests to ensure long-term resilience.
  • Property restrictions: While standard houses are widely eligible, some lenders cap borrowing at 85% to 90% LTV for new-build flats or non-standard construction types.
  • Family-assisted alternatives: If borrowing limits or deposit amounts fall short, Joint Borrower Sole Proprietor (JBSP) mortgages, guarantor arrangements, or gifted deposits can bridge the gap.
First-time buyers planning their home-buying budget

Back to top

Preparing to apply

What is an agreement in principle?

An agreement in principle may also be called a decision in principle or mortgage in principle. It is an indication of how much a lender might be prepared to lend based on initial information and, depending on the lender, a credit check.

It can help you set a more realistic property search and may give an estate agent confidence that you have started preparing your finances. It is not a mortgage offer and does not guarantee that a full application will be approved. The lender will still need to assess the full application, supporting documents and the property.

Before submitting an agreement in principle, we will confirm whether the lender uses a soft credit check (which leaves no visible footprint for other lenders) or a hard search. We advise against submitting multiple speculative applications across different lenders simply to compare provisional borrowing figures, as repeated hard searches in a short period can adversely affect your credit score.

Prepare the information lenders may ask for

Requirements vary, but it is sensible to organise the following early:

  • proof of identity and current address;
  • evidence of income, such as payslips, accounts or tax documents appropriate to your employment status;
  • recent bank statements;
  • details of loans, credit cards, maintenance payments and other financial commitments;
  • evidence showing where the deposit has come from; and
  • information about any gifted deposit or other financial contribution.

If part of the deposit is being gifted, the lender and conveyancer may require information from the person providing it, including identification, evidence of the source of funds and confirmation of whether the money is a gift or must be repaid. Tell the adviser about a gifted deposit at the start because lender requirements differ.

Back to top

Plan ahead

Budget for more than the deposit

Depending on the property and mortgage, costs may include:

  • property transaction tax, where payable;
  • solicitor or conveyancer fees;
  • local authority, drainage, environmental and other searches;
  • a property survey;
  • mortgage valuation, arrangement, booking or product fees where applicable;
  • Land Registry or registration fees;
  • removal, storage and initial furnishing costs;
  • buildings and contents insurance;
  • immediate repairs or essential work; and
  • service charges, estate charges or other leasehold costs where applicable.

Ask for written quotations and check what is included. A low headline price may not include searches, bank transfer charges, supplementary legal work or tax-return administration.

Property tax

Stamp duty and property tax for first-time buyers

The tax system depends on where the property is located, not where the buyer currently lives. England and Northern Ireland use Stamp Duty Land Tax; Scotland uses Land and Buildings Transaction Tax; and Wales uses Land Transaction Tax.

England and Northern Ireland: Stamp Duty Land Tax

Eligible first-time buyers purchasing a main residence for £500,000 or less can claim First-Time Buyers' Relief. The current rates are:

  • 0% on the portion up to £300,000; and
  • 5% on the portion from £300,001 to £500,000.

If the price is more than £500,000, First-Time Buyers' Relief is not available and the normal residential rates apply to the purchase. Every buyer must meet the first-time buyer conditions and the property must be intended as the buyer's main residence.

Official sources

Scotland: Land and Buildings Transaction Tax

Eligible first-time buyers can claim relief that increases the LBTT nil-rate band from £145,000 to £175,000. The maximum tax saving from the relief is currently £600. Buyers paying more than £175,000 can still receive the benefit of the relief on the lower part of the purchase price.

Where there is more than one buyer, each buyer must satisfy the conditions. The relief is not available where the Additional Dwelling Supplement applies.

Official sources

Wales: Land Transaction Tax

Wales does not currently have a separate first-time buyers' relief. First-time buyers normally use the main residential LTT rates. The current main rates are:

  • 0% on the portion up to £225,000;
  • 6% on the portion from £225,001 to £400,000;
  • 7.5% on the portion from £400,001 to £750,000;
  • 10% on the portion from £750,001 to £1.5 million; and
  • 12% on the portion above £1.5 million.

Official sources

Property-tax rates and reliefs can change. Figures were checked on 10 August 2026 and are provided as general information, not tax or legal advice. Use the relevant government calculator and ask your conveyancer to confirm the amount and any relief before committing to a purchase.

Lifetime ISA

Using a Lifetime ISA toward a first home

Subject to the scheme rules, Lifetime ISA savings can be used toward a first home costing £450,000 or less. The purchase must normally take place at least 12 months after the first payment into the account, be made with a mortgage and be handled through a solicitor or conveyancer. A withdrawal charge normally applies if money is taken out for a reason that does not meet the scheme rules.

If two eligible first-time buyers each have a Lifetime ISA, both may be able to use their savings and bonuses. Lifetime ISA rules are separate from mortgage-lender criteria and property-tax relief rules.

GOV.UK: withdrawing from a Lifetime ISA to buy a first home

This is general information rather than personalised tax, legal or investment advice. Check the current rules and take appropriate financial advice where needed.

Back to top

First-time buyers inspecting a property with a surveyor

Choosing a home

Look beyond the decoration when viewing a home

During a viewing, consider the property's condition as well as how it looks. Ask about the age and condition of the roof, heating, windows and electrics; look for signs of damp or movement; check mobile and broadband availability; and understand parking, access, boundaries and any shared areas.

For leasehold properties, ask early about the remaining lease term, service charges, planned major works, ground rent and any restrictions. For new-build homes, ask what is included, whether a reservation fee applies, the expected completion arrangements and how snagging will be handled.

A mortgage valuation is not a property survey

The lender's valuation is primarily for the lender to assess whether the property provides suitable security for the mortgage. It is not a detailed report on the condition of the home. An independent survey can help identify defects and future maintenance that may affect your decision or budget. The appropriate survey level depends on the age, type and condition of the property.

GOV.UK: how to buy a home

Back to top

The home-buying journey

From an accepted offer to getting the keys

The precise legal process differs across the UK, but the main work normally includes:

  1. 1

    Appoint a solicitor or conveyancer. They handle the legal transfer, searches, enquiries and property-tax return where required.

  2. 2

    Submit the full mortgage application. The lender assesses the applicants, supporting documents and property.

  3. 3

    Arrange the valuation and survey. These serve different purposes and may take place separately.

  4. 4

    Review the legal and property information. Ask questions until you understand the title, searches, survey findings and any leasehold or estate obligations.

  5. 5

    Receive and review the mortgage offer. Check the amount, term, rate, fees, conditions and any requirements before proceeding.

  6. 6

    Become legally committed at the relevant stage. The timing and terminology differ by nation; follow your conveyancer's advice before transferring funds or making irreversible arrangements.

  7. 7

    Complete and move in. The purchase money is transferred, ownership changes and the keys are released.

No adviser or conveyancer can promise a fixed completion timescale — property chains, searches, surveys, property valuations, legal enquiries, new-build schedules and individual circumstances can all affect timing, so we provide realistic milestone ranges rather than fixed dates.

See the wider home-buying journey
First-time buyer reviewing the home-buying process with a professional

Protection and insurance

Plan for the home and the people paying for it

Your lender will normally require appropriate buildings insurance, with the start date confirmed by the lender and conveyancer. Contents insurance can cover belongings, while personal protection may help with the financial effect of death, serious illness or being unable to work, depending on the cover selected.

Protection recommendations are always tailored to your household's specific needs, budget, existing employer benefits and eligibility. Because every buyer's personal and financial commitments differ, the level and types of cover recommended will be unique to your circumstances.

Explore protection and home insurance.

Back to top

Common questions

Frequently asked questions

Am I still a first-time buyer if I previously inherited a property?

Previous ownership can affect first-time buyer tax relief even if the property was inherited, gifted, jointly owned or located outside the UK. Mortgage lenders and schemes may use different definitions. Tell your adviser and conveyancer about any previous property interest so they can check the relevant rules.

Does an agreement in principle guarantee my mortgage?

No. It is an initial indication based on limited information. A full mortgage application remains subject to the lender's assessment, supporting evidence, credit checks, the property valuation and the lender's criteria at the time.

How much deposit does a first-time buyer need?

There is no single amount that is right or available for every buyer. The deposit affects the loan-to-value, but mortgage availability also depends on affordability, credit history, property type and lender criteria. An adviser can assess the position using your actual circumstances.

Is the lender's valuation the same as a survey?

No. The valuation is mainly for the lender. An independent survey is intended to give the buyer more information about the property's condition and potential repair or maintenance issues.

Can I use a gifted deposit?

Many lenders consider gifted deposits, but their requirements differ. The lender and conveyancer may ask for a gift declaration, identification and evidence showing where the money came from. Disclose the gift before applying.

Do first-time buyers always avoid stamp duty or property tax?

No. The answer depends on the nation, price, intended use, previous property ownership and the circumstances of everyone buying. England and Northern Ireland offer qualifying first-time buyer SDLT relief, Scotland has limited LBTT first-time buyer relief, and Wales does not currently have separate first-time buyer LTT relief.

Can I use a Lifetime ISA toward a first home?

Subject to the scheme rules, Lifetime ISA savings can be used toward a first home costing £450,000 or less. The purchase must normally take place at least 12 months after the first payment into the account, be made with a mortgage and be handled through a solicitor or conveyancer. A withdrawal charge normally applies if money is taken out for a reason that does not meet the scheme rules.

Can I get a first-time buyer mortgage with a 5% deposit?

Yes. Many UK lenders offer 95% loan-to-value (LTV) mortgages requiring a 5% deposit. Approval depends on meeting the lender's credit scoring, debt-to-income affordability checks, and property eligibility criteria, as some lenders restrict 95% LTV on new-build apartments or unusual property types.

Back to top

How Anderson Reed Financial Services can help

A Mortgage and Protection Advisor can help you understand the information lenders need, compare suitable mortgage options from the lenders available to the firm, explain costs and conditions and keep the mortgage work moving alongside the estate agent and conveyancer.

The starting point is a conversation about your plans, deposit, income and commitments. We will explain what can be assessed now, what may need further evidence and which next step is appropriate for your circumstances.

Talk through your first mortgage Call 02382 127779
Meet our Mortgage and Protection Advisors

Mortgage information

The information given in this website does not contain all of the details you need to choose a mortgage. Make sure that you read the separate key facts illustration before you make a decision. The FCA does not regulate some forms of buy to let mortgages.

It is our intention to provide you with a high level of customer service at all times. If there is an occasion when we do not meet these standards and you wish to register a complaint, please write to: Compliance Department, Connect IFA Ltd, 39 Station Lane, Hornchurch, RM12 6JL or call: 01708 676110. If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.

Anderson Reed and Anderson Reed Financial Services are trading names of Anderson Reed Financial Services Ltd, an Appointed Representative of Connect IFA Ltd, which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 441505) and is entered on the Financial Services Register under firm reference number 947349. Registered in England and Wales under number 13190705. Calls may be recorded for training and monitoring.

View our Privacy Statement View our Cookie Statement

Important information

Your property may be repossessed if you do not keep up repayments on your mortgage.

We charge a fee for mortgage advice, and our standard fee is £695.

Regulatory information

Our regulatory status

Anderson Reed and Anderson Reed Financial Services are trading names of Anderson Reed Financial Services Ltd, an Appointed Representative of Connect IFA Ltd, which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 441505) and is entered on the Financial Services Register under reference 947349. The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

Fees and commission

We charge a fee for mortgage advice, and our standard fee is £695.

Commission disclosure: We are a credit broker and not a lender. We have access to an extensive range of lenders. Once we have assessed your needs, we will recommend a lender or lenders that provide suitable products to meet your personal circumstances and requirements, though you are not obliged to take our advice or recommendation. Whichever lender we introduce you to, we will typically receive commission from them after completion of the transaction. The amount of commission we receive will normally be a fixed percentage of the amount you borrow from the lender. Commission paid to us may vary in amount depending on the lender and product. The lenders we work with pay commission at different rates. However, the amount of commission that we receive from a lender does not have an effect on the amount that you pay to that lender under your credit agreement.

Your cookie choices

We use essential cookies to keep this site working. You can also choose to enable analytics cookies to help us improve the site and advertising cookies to measure campaign performance. Read our Cookie Statement.

You are leaving our website

Please be aware that neither Anderson Reed Financial Services nor Connect IFA is responsible for the accuracy of information on external websites.