First-time buyer mortgages: everything you need to know before you apply
Getting a mortgage for the first time is one of those things that seems impossibly complicated until you understand the pieces. Here's the whole process, in the right order, without the jargon.
How much can you borrow?
Most lenders will lend between 4.5× and 5.5× your gross annual income. For a couple each earning £35,000, that's £315,000 to £385,000 before deposit. The actual figure depends on your credit, existing debts, deposit size and which lender you approach. Use my borrowing calculator for a starting number, but treat it as a range — the real answer comes from a lender's credit model.
How much deposit do you need?
Minimum is 5% of the purchase price. With a £200,000 property, that's £10,000. But 10–15% opens better rates and more lenders. The deposit needs to come from savings, a gift from a parent or family member (with a signed letter), or a combination. You can't borrow your deposit.
First-time buyer schemes worth knowing
The Lifetime ISA gives you a 25% government bonus on savings up to £4,000 per year — worth up to £1,000 per year towards your deposit. You must be under 40 to open one. Shared Ownership lets you buy 25–75% of a property and pay rent on the rest — useful in high-price areas. Check whether these schemes apply to properties in your area and price bracket before relying on them.
What is a Decision in Principle?
A DIP (or Agreement in Principle) is a soft credit check that tells you — and estate agents — roughly how much a lender will offer. It's not a mortgage offer. It doesn't commit you to anything. But you'll need one to make offers on properties. Most estate agents won't take you seriously without one. It takes about 15 minutes to get one through a broker.
The credit score question
Lenders use credit scores as one factor among many. A perfect credit score with a 5% deposit is worth less than a decent credit score with a 15% deposit. Things that matter: being on the electoral roll at your current address, no missed payments in the last 3 years, no payday loans in the last 12 months, and no large outstanding balances relative to your limits.
What happens after you make an offer?
Estate agent accepts the offer. You instruct a solicitor. Your broker submits the full mortgage application. The lender does a full credit check and a valuation survey. They issue a formal mortgage offer. Your solicitor does the legal work (searches, contract review). You exchange — now it's legally binding. You complete. You get the keys.
First-time buyer and not sure where to start?
A 15-minute call will tell you what you can borrow, what it'll cost you monthly, and what to do before you apply.
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