Buying your first home in the UK is exciting, stressful, and expensive in ways nobody explains properly. Most first time buyers focus on the deposit, then get blindsided by fees, surveys, solicitor costs, moving costs, and the sheer number of decisions you have to make under pressure.
This guide is designed to make the process feel predictable.
You will learn what deposit you really need, which mortgage type fits different situations, how affordability is assessed, what the hidden costs are, and a step by step roadmap from “I’m thinking about buying” to “keys in hand”.
If you’ve read my earlier post on Credit Score UK Explained, you already know one of the biggest levers lenders care about. In this guide, we’ll turn that knowledge into a home buying plan.
How Deposits Work And What You Really Need
A deposit is the money you put down upfront when buying a property. Your mortgage covers the rest.
The size of your deposit affects:
- whether you qualify for a mortgage
- the interest rate you are offered
- your monthly payment
- how resilient you are if property prices fall
Deposit size and loan to value
Lenders talk about loan to value (LTV). It is simply:
Mortgage amount ÷ property value
If you buy a £300,000 property with a £30,000 deposit, you borrow £270,000. That is 90 percent LTV.
In general, the lower your LTV, the better the deal options tend to be. You do not need perfection, but it helps to understand the trade off.
Is a 5 percent deposit realistic
Some buyers can buy with 5 percent, but it is usually harder. Expect:
- fewer lenders
- stricter affordability checks
- higher rates compared with a bigger deposit
If you can reach 10 percent, it typically opens more options and reduces stress.
The deposit is not your only upfront money
This is a big mistake first time buyers make.
Even if you have a deposit, you still need a cash buffer for:
- solicitor fees and searches
- surveys
- mortgage fees
- moving costs
- basic furniture and immediate repairs
A practical rule many buyers use is:
Deposit plus fees plus a safety buffer.
The safety buffer matters because homeownership has surprise costs. Boilers do not wait for you to recover financially.
Where should you keep your deposit while saving
If you are buying soon, your deposit should usually be kept in a safe place, not exposed to market volatility.
For long term saving, many people use a mixture of:
- high interest savings
- cash style products
- government supported options where eligible
If your home buying timeline is several years away, investing may be considered, but it adds risk. The closer you get to buying, the more you want certainty.
A quick note on Lifetime ISA and other help
Some first time buyers use a Lifetime ISA to boost their deposit. Rules can change over time, so always check the current eligibility and property price limits on official government guidance before relying on it.
Mortgage Types Explained In Plain English
Mortgage types sound confusing because the industry loves jargon. You do not need jargon. You need clarity.
Here are the mortgage types most first time buyers encounter.
Fixed rate mortgages
A fixed rate mortgage keeps your interest rate the same for a set period, commonly two or five years.
Why people choose fixed:
- predictable monthly payments
- easier budgeting
- less worry if rates rise
Downside:
- you usually pay early repayment charges if you leave during the fixed period
- if rates fall, you are still locked into your rate until the deal ends
For many first time buyers, fixed rates feel calmer. Calm is underrated.
Tracker mortgages
A tracker mortgage tracks an interest rate benchmark, often linked to the Bank of England base rate plus a margin.
Why people choose trackers:
- can be competitive when rates are stable or falling
- often more flexible than fixed deals
Downside:
- monthly payments can rise quickly if rates rise
Trackers can work, but only if your budget can handle an increase without panic.
Discount mortgages
A discount mortgage gives you a discount off the lender’s standard variable rate for a period.
These can be less common for first time buyers, but you may see them. The risk is that standard variable rates can change at the lender’s discretion, so your payment predictability is weaker than a fixed deal.
Standard variable rate
This is the lender’s default rate. It is typically higher than promotional deals.
Most borrowers try not to stay on it for long. When your initial deal ends, you often move onto this rate unless you remortgage or take a new product.
Repayment mortgages versus interest only
Most first time buyers use a repayment mortgage, which means each monthly payment reduces the mortgage balance and pays interest.
An interest only mortgage only pays the interest each month, leaving the full balance to repay later through another method. Interest only is usually harder to qualify for and requires a credible repayment plan.
For first time buyers, repayment mortgages are the normal route.
Mortgage term
The term is how long you take the mortgage over, such as 25, 30, or 35 years.
A longer term usually means:
- lower monthly payments
- higher total interest paid over the full term
Many buyers choose a longer term for affordability, then overpay when possible. Overpayments can reduce interest and shorten the mortgage, but check overpayment limits and early repayment charges.
Should you use a mortgage broker
A good broker can help, especially if:
- your income is complex (self employed, multiple jobs, variable pay)
- your credit history needs careful handling
- you are unsure what you can borrow
- you want access to deals not available directly
A broker is not mandatory, but for many first time buyers it reduces mistakes and saves time.
Mortgage Affordability And What Lenders Actually Check
Affordability is where most surprises happen. You might have a deposit and still be declined because the lender does not think your income supports the monthly payment.
Income and stability
Lenders look at:
- your income level
- employment type and stability
- length of time in your role
- whether income is guaranteed or variable
If you have overtime, bonuses, or commission, lenders may only count part of it, or require a history over time.
If you are self employed, lenders usually want a track record, often evidenced by accounts or tax returns. Requirements vary.
Your existing commitments
Affordability is not just about income. It is about what is left after commitments.
Lenders look at:
- credit card balances and limits
- car finance
- personal loans
- overdrafts
- childcare costs
- other regular payments
Even if you pay your credit card in full, large limits and high utilisation can affect how lenders view risk. That is why improving your credit profile and reducing balances helps.
Credit score versus credit file
As covered in the credit score post, the number is not the whole story.
Mortgage lenders care about:
- payment history
- defaults and missed payments
- how recently you applied for credit
- stability of address history
- current debt levels
If you are mortgage planning, a simple approach is:
- reduce card balances
- avoid applying for new credit for a while
- keep bills paid on time by direct debit
- keep your details consistent across accounts
How much can you borrow
Many buyers look for a simple multiple, but lending is more nuanced. Lenders run affordability models that consider:
- income
- outgoings
- stress tests on rates
- household circumstances
A useful step early on is a Decision in Principle (DIP). It gives a rough idea of what a lender may offer, subject to full checks.
Use eligibility tools and a cautious approach. Too many full applications can create unnecessary hard searches.
The hidden affordability killer
The most common killer is not income. It is lifestyle commitments that have crept up:
- subscriptions
- finance payments
- BNPL commitments
- persistent overdraft use
- high credit card balances
You do not need to live like a monk. But for mortgage readiness, simplifying commitments for several months can make approvals smoother.
The Hidden Costs Of Buying A House In The UK
The deposit is the headline. The hidden costs are the part that hurts.
Below are the main costs first time buyers should plan for. Amounts vary widely, but the categories are consistent.
Solicitor and conveyancing fees
You will need a conveyancer or solicitor to handle:
- legal checks
- contracts
- searches
- transferring funds
- registering the property
Costs include legal fees and “disbursements” such as search fees. Get a written quote and ask what is included.
Survey costs
Your lender will do a valuation for their own protection. That is not the same as a survey for you.
Surveys can help spot:
- damp
- roof issues
- structural movement
- electrical concerns
- problems that will cost you later
Many buyers skip surveys to save money and regret it later. A survey is not a guarantee, but it can reduce nasty surprises.
Mortgage fees
Depending on the product, you may face:
- arrangement fees
- booking fees
- valuation fees
- broker fees if using a broker
Some fees can be added to the mortgage, but that increases interest over time. Paying upfront can be cheaper, but only if it does not drain your safety buffer.
Insurance
You may need:
- buildings insurance from exchange of contracts
- contents insurance once you move in
- life insurance or income protection if you want extra security
Mortgage lenders usually require buildings insurance because the property secures the loan.
Moving costs
Even if you “do it yourself”, costs appear:
- van hire
- fuel
- packing materials
- storage
- cleaners
If you pay a moving company, costs rise.
Immediate repairs and setup costs
First time buyers underestimate this.
Common early costs:
- locks changed
- minor repairs
- paint and basic decorating
- furniture and appliances
- curtains and blinds
You do not need everything immediately, but you need some cash available.
Stamp duty and taxes
Stamp duty rules can change. Your best approach is to check the current guidance and use an official calculator when you are close to buying.
Even when stamp duty is low or reduced for first time buyers, always confirm what applies to your situation.
Leasehold costs and service charges
If you buy a flat, pay attention to:
- service charges
- ground rent
- major works
- lease length
Leasehold costs can change your monthly affordability more than people expect. Always read the details carefully and ask questions early.
A simple buffer rule
To avoid getting squeezed, many first time buyers aim to keep a buffer even after completion.
A practical goal:
Keep a few months of essential expenses available if possible, especially in the first year of ownership.
Step By Step First Time Buyer Process From Start To Keys
Here is the process, broken down so it feels manageable.
Step 1 Get clear on your numbers
Before viewings, you want clarity on:
- deposit amount
- monthly payment comfort zone
- extra costs budget
- emergency buffer
If you can only afford the mortgage payment by stretching, you are building stress into your life from day one.
Step 2 Clean up your credit profile
Three simple moves:
- pay everything on time by direct debit
- reduce credit card balances
- stop unnecessary applications
If you are using BNPL regularly, reduce it. It can complicate affordability and adds noise to your financial picture.
Step 3 Get a Decision in Principle
A DIP gives you confidence and strengthens offers. It shows agents and sellers you are serious.
Step 4 Choose area and property type realistically
First time buyers often set “dream specs” based on emotions, then reality hits.
Create a shortlist:
- must haves
- nice to haves
- deal breakers
Remember: you can change kitchens later. You cannot change location easily.
Step 5 View properties and ask better questions
Do not just admire the living room.
Ask:
- how old is the boiler
- any history of damp
- what are the average bills
- what work has been done and when
- for flats, what are the service charges and planned works
Step 6 Make an offer and negotiate calmly
Offer strategy is personal, but avoid emotional bidding.
Decide your maximum number based on affordability and future costs, not fear of missing out.
Step 7 Instruct a solicitor and apply for the mortgage
Once your offer is accepted:
- instruct conveyancing
- submit the full mortgage application
- organise your survey
Be prepared for the lender to request documents such as payslips, bank statements, and proof of deposit.
Step 8 Surveys, searches, and the slow middle
This is where many buyers get anxious. Delays are common.
Your job is to:
- respond quickly to requests
- keep documents organised
- avoid taking on new debt during the process
Step 9 Exchange of contracts
At exchange, you become legally committed. This is often when buildings insurance becomes essential.
Step 10 Completion and getting the keys
Completion is the final transfer. Then you get the keys and you are a homeowner.
Plan for the first week:
- set up utilities
- take meter readings
- change locks
- update address details
Common Mistakes To Avoid And First Time Buyer FAQs
This final section is here to save you money and stress.
Mistake 1 Buying at the top of your affordability
Just because a lender offers a number does not mean it is wise.
If rates rise, bills rise, or income changes, a stretched mortgage becomes a trap. Choose a payment you can live with comfortably.
Mistake 2 Spending your entire cash pile on the deposit
A bigger deposit is great, but not if it leaves you with no buffer for repairs and life events.
Mistake 3 Ignoring the leasehold details
For flats, service charges and lease terms can be a bigger issue than the mortgage payment. Get clarity early.
Mistake 4 Skipping surveys
A survey can feel like an annoying cost until it saves you thousands. It is risk management.
Mistake 5 Changing jobs or taking new credit mid process
Mortgage applications can fail because the buyer:
- takes out a new car finance deal
- adds a new credit card
- changes employment unexpectedly
- increases BNPL usage
Try to keep your situation stable until completion.
Mistake 6 Choosing the cheapest solicitor without checking quality
Conveyancing quality matters. A slow or unresponsive solicitor can drag the process and create stress.
FAQs
How much deposit do I need as a first time buyer in the UK
It depends on lender criteria and your circumstances. Some buyers can buy with smaller deposits, but larger deposits often improve options and reduce rates.
Should I fix my mortgage rate for two or five years
Two year fixes can offer flexibility but may expose you to more frequent remortgaging risk. Five year fixes can offer stability. Choose based on your budget comfort and how much payment change you could handle.
Do I need a mortgage broker
Not always, but many first time buyers benefit from one, especially with complex income or credit history.
What is the biggest hidden cost
Often it is the combination of legal fees, surveys, and immediate repairs. Individually they seem manageable. Together they can be a serious chunk of money.
Can I buy a home if my credit score is not perfect
Yes, depending on the details of your credit file and affordability. Late payments and defaults can matter more than the number. Improving your profile for several months before applying can help.
Disclaimer
This article is for educational and informational purposes only and does not constitute financial advice, mortgage advice, legal advice, or a recommendation to take any particular mortgage product. Mortgage rules, fees, and government schemes can change and vary by lender and personal circumstances. Always verify details with official sources and consider speaking with a regulated mortgage adviser or qualified professional for personalised guidance.