First-Time Buyer Guide UK 2026: From Saving to Keys

The minimum deposit for most mortgages is 5% of the property price. On a £250,000 home, that's £12,500. However, the bigger your deposit, the better mortgage rates you'll get. At 10% (£25,000), rates improve noticeably. At 15-20%, you access the best deals available. In practice, most first-time buyers aim for 10% as a balance between achievability and good rates. Remember that the deposit isn't the only upfront cost — you'll also need money for stamp duty (though first-time buyers get relief on properties up to £425,000), solicitor fees, surveys, moving costs, and furnishing.

A Lifetime ISA should be your first port of call — you get a 25% government bonus on up to £4,000/year (that's £1,000 free annually). You must have had the LISA open for at least 12 months before using it for a property purchase, and the property must cost £450,000 or less. Beyond the LISA, use the highest-interest Cash ISA or savings account you can find. For deposits you're building over 5+ years, consider a Stocks and Shares LISA — the potential for higher returns comes with short-term volatility risk, but over longer periods, investing historically outperforms cash.

A mortgage is a loan secured against the property you're buying. You'll repay it monthly over a term (typically 25-35 years). The two main types are fixed-rate (your interest rate stays the same for a set period, usually 2 or 5 years — giving you payment certainty) and variable/tracker (your rate moves with the Bank of England base rate or your lender's standard variable rate — potentially cheaper but less predictable). Most first-time buyers choose a fixed rate for budget certainty. When your fixed period ends, you remortgage to a new deal — letting it roll onto the standard variable rate is almost always more expensive.

Lenders assess affordability based on your income, outgoings, credit history, and the property. To improve your chances: check your credit report and fix any errors, reduce outstanding debt (especially credit cards), avoid applying for new credit in the 6 months before your mortgage application, save evidence of regular saving (lenders like seeing consistent saving habits), and reduce discretionary spending in the 3 months before applying (lenders review recent bank statements). Get a mortgage Agreement in Principle (AIP) before house hunting — it tells you how much you can borrow and shows sellers you're a serious buyer.

Beyond the deposit, budget for these costs: Stamp duty — first-time buyers pay nothing on properties up to £425,000, and 5% on the portion between £425,001 and £625,000. Solicitor/conveyancer fees — typically £1,000-£2,000. Survey — £250-£600 depending on the type (at minimum, get a HomeBuyer's Report). Mortgage arrangement fee — some lenders charge £500-£2,000 for their best rates. Removal costs — £300-£1,500 depending on distance and volume. Furnishing — especially if you're moving from a furnished rental. Total additional costs typically run £3,000-£6,000 on top of your deposit.

Several government schemes help first-time buyers: the Lifetime ISA (25% bonus on savings up to £4,000/year), Shared Ownership (buy a share of a property, typically 25-75%, and pay rent on the rest), First Homes scheme (new-build homes sold at a minimum 30% discount to first-time buyers in certain areas), and mortgage guarantee schemes that help lenders offer 95% mortgages. Check what's available in your area — schemes vary by region, and new ones launch periodically. Your local council or housing association website is a good starting point.

1) Save your deposit and get mortgage-ready. 2) Get a mortgage Agreement in Principle. 3) Find a property and make an offer. 4) Once accepted, instruct a solicitor and apply for the full mortgage. 5) Commission a survey. 6) Your solicitor handles conveyancing (legal checks, searches, contract preparation). 7) Exchange contracts (legally binding — you pay your deposit to the solicitor). 8) Complete (mortgage funds transfer, you get the keys). The whole process typically takes 12-16 weeks from offer acceptance to completion. It's stressful, but understanding each step makes it manageable.