First time home buyers

A Guide to First Time Home Buyers Mortgages

A first time home buyers' mortgage is a home loan for buyers looking to purchase their very first home or property.

It is also known simply as a first mortgage.  You can qualify for first time home buyer or first mortgage status if:

  • you have never bought a property in the past

  • you want to get back onto the property ladder

What types of first time home buyers mortgages are available?

As a first time home buyer, you can apply for all types of mortgages. You can, for example, choose between a repayment mortgage and an interest-only first mortgage. Furthermore, you will probably be offered some of the best fixed, capped, discounted, variable, cash back, and tracker deals in the market as part of your first mortgage

How do first time home buyers mortgages work?

  • As it is a first mortgage, the industry standards are slightly more generous. To buy their first home, first time home buyers will usually be offered loans varying between 3 to 4 times their own salary or 2.5 to 3 times a joint couple's salary.

  • It is quite common for first time home buyers to take out a 100% mortgage to be able to get on to the property market.  There are some lenders who will even allow first time home buyers to borrow up to 125% of the value of their first home to help cover other home buying costs including survey fees, valuation fees, solicitor fees, and more.

  • Like most standard products, first mortgages will require at least a deposit of 5% of the property's value. If taking out a 100% mortgage, no deposit is required.

What are the benefits of first time home buyers mortgages?

First time home buyers are in great demand amongst mortgage lenders as lenders hope you will stay with them for a long time.  First time home buyers also tend to get offered some of the best deals and special offers, again to encourage them to choose their package over a competitor's.  Some of the more attractive first mortgage packages offered to first time home buyers by competing lenders include the following:

  • Getting cash back payments and other rewards

  • Subsidising fees and costs or paying them in full

  • Having the opportunity to pick and choose all kinds of rate deals and discount offers

With such an array of first mortgages from which to choose, it is a good idea to shop around and choose a first mortgage deal that will help you most in order to purchase your dream first home. 

Some important considerations for first time home buyers

Over recent years, house prices have been rising astronomically in the UK, especially in certain areas like the South-East. First time home buyers are finding it impossible to step onto the property ladder. Many have had to overstretch their finances or borrow maximum levels to enable to purchase their first home. If you are in such a position, take care to only borrow what you can afford. It is all too easy to get into fall into financial difficulties. Work out what you can afford and stick to your budget for your first mortgage.

As a first time home buyer, it is probably wise to look at fixed rate or capped deals, so you can guarantee that your monthly repayments

Consider taking out a deal that gives you free repayment holidays; this will give you some flexibility if you find yourself suddenly short of funds.

As a first time home buyer with no previous experience of buying property, it is crucial that you read the small print. Make sure you do not find yourself tied into first mortgage deals which carry unfavourable clauses and restrictions.

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