Follow our 3-step guide to buying your first home
November 9, 2023
Buying your first home is exciting but it can also be daunting. To help you, we’ve narrowed it down to the three main things you need to consider.
Save your deposit
First time buyers need a deposit of at least 10%. Use our budget planner to work out your spending habits and compare this with your income. You may have more scope than you realise for saving a deposit. You should save your deposit in a savings account separate to your current account so that you’re not tempted to spend it. You can use our savings account comparison Money Tool to make sure you’re getting the best interest rate on your savings.
Allow for additional costs when buying your first house. These include stamp duty, solicitor fees, survey costs, engineer reports, moving costs, repairs and furnishings. You should factor extra expenses into your budget as well as the 10% deposit. Solicitors’ fees vary and may be a percentage of the property price or a flat fee. Get written quotes from a number of solicitors with details of their professional fees and other costs before you decide who to go with.
Research your mortgage
You can apply for your mortgage once you’ve saved up a deposit. First time buyers can borrow up to four times their gross annual income. The most important thing to consider is the interest rate. Some lenders might tempt you with incentives such as cashback, but you should always work out the best deal for yourself. You should think about the cost of the mortgage over the long term, rather than any short-term incentives.
The interest rate combined with the length of the mortgage, gives you the total amount you will have to pay. Compare your mortgage options using our mortgage Money Tool.
Top Tip
Get mortgage approval in principal before you start looking at properties. You’ll know exactly then which price range you can afford. It’s natural to want to start looking immediately, but the seller or estate agent may not take you seriously without mortgage approval in principle.
Apply for ‘first time buyer’ supports
You can access a range of supports as a first time buyer. Don’t be shy to apply! The Help to Buy Scheme is an incentive for first time buyers and was recently extended to the end of 2025. The Local Authority Affordable Purchase Scheme makes it possible for those on moderate incomes to buy new homes at reduced prices. If you’re finding it difficult to get a loan from a mainstream lender, you should ask your local authority.
Any applicants buying their first home through this can now also qualify for the help to buy scheme. This came into effect in October 2023. First time buyers may also apply for the First Home Scheme. Our housing section has more information on buying a home.
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