Compare First-time Buyer Mortgages (2024)

* Rate refers to deals available through our online broker, Better.co.uk. (data correct at 3 April 2024).

** Average number of days the lender took to process mortgage applications from submission to approval in the last three months. Data applies to Better.co.uk customers (overall average was 43 days), accurate on 3 April 2024. Approval times vary according to circ*mstances, application and the lender’s current performance, so the average quoted speed may not reflect your own experience.

*** Fairer Finance (customer experience scores) April 2024.

Better.co.uk compares mortgage deals from more than 100 lenders including all the major high street names. A handful of lenders including First Direct and Lloyds Bank do not work with brokers. While all information is correct at the time of writing, rates and deals are subject to frequent change

We obtained data from our mortgage partner Better.co.uk, showing which lenders offered the lowest rates for high loan to value mortgage deals (90%, 95% and 100%) on 3 January 2024.

To arrive at our Forbes Advisor star ratings, we also considered average mortgage approval times (from submission to offer) over the last three months and customer experience scores as determined by independent data provider, Fairer Finance (correct as of January 2024).

All mortgage offers listed are valid for six months.

Bear in mind that the exact costs of any mortgage will vary according to your deposit level (or equity you have in your property) and your personal credit score.

Mortgage rates and offers can change on a daily basis.. A mortgage broker, such as Better.co.uk, can provide guidance on which options make the most sense for your circ*mstances.

First-time buyer mortgage deals are designed for buyers getting their first foothold on the property ladder. They tend to require only a small cash deposit, such as 5% or 10%. This means you can borrow up to 95% of the value of the home you’re purchasing. This would be called a 95% loan to value mortgage, for example.

Skipton building society has a 100% mortgage deal available for eligible first-time buyers. Its Track Record mortgage is the only deal on the market available with no deposit. It requires evidence that you’ve made rental payments for at least 12 months, among other conditions. Read more about Track Record in our guide on Skipton mortgage rates.

First-time buyers will have an affordability assessment and credit check as part of their mortgage application. If you have the right level of deposit and the lender is happy the mortgage is affordable you’ll get the green light to buy your first home.

Our interactive mortgage calculators will give you an idea of how much a mortgage of different sizes might cost in monthly repayments at various rates of interest.

First-time buyers will usually need a minimum cash deposit of 5% of the property’s value. One exception, as mentioned above, is the Skipton building society Track Record deal, which offers up to 100% of the loan required.

Yorkshire Building Society has also launched a first-time buyer mortgage for borrowers with just a £5,000 cash deposit. It is available for home purchase up to £500,000, so effectively you could borrow up to a maximum loan to value of 99%.

Alternatively, you could consider the government’s Mortgage Guarantee Scheme, which is designed to encourage lenders to offer mortgages to borrowers with just a 5% deposit. Major lenders including HSBC, Barclays, Santander, Lloyds and NatWest offer deals under the scheme.

There is a broad range of 95% mortgages available so always compare your options.

Generally, the bigger your deposit, the better your chances of being accepted for a mortgage and the cheaper the interest rate you’ll pay. So it’s worth saving up as much as you can. You’re likely to secure a lower interest rate if you have a 15% deposit or 20% deposit, for example, compared to just 5% or 10%.

You could boost your deposit in other ways, such as by using a government scheme – more on this below – or getting help from parents if that’s an option.

Remember, you’ll need to factor in the other costs of a property purchase, such as mortgage arrangement fees, solicitor’s fees, surveys, and property searches.

First-time buyers don’t pay stamp duty on the first £425,000 of a purchase on property worth up to £625,000.

If you are buying with someone else, you will both need to be first-time buyers (which means neither buyer must have owned a property now or in the past) to be eligible for the first-time buyer stamp duty exemption.

Find out what could be payable with our stamp duty calculators.

Mortgage rates are changing fast. We’ve listed our pick of the best deals at high loan to value ratios above in our tables. But below is a live table of the kinds of deals that are on the market right now.

Tailor the results by inputting details of the property value you are looking at – and how much of that sum you will need to borrow from the lender.

You can then select what kind of mortgage you want (say, a fix or tracker) and over how long. And if you’re looking for shared ownership deals, check that box to see mortgages that will support the scheme.

As a rough guide, you could borrow up to four-and-a half-times’ single or joint income as a mortgage amount.

However, the actual amount you can borrow as a first-time buyer will depend on the lender’s own ‘affordability assessment’. This looks at what you spend, as well as what you earn, to assess how much you can realistically afford to pay towards a mortgage each month.

It’s a rigorous test which will consider a whole raft of expenses including other outstanding debts, car costs, childcare fees, household bills, entertainment expenses, right down to grocery bills.

The lender will then apply an ‘assumed’ interest rate into its affordability calculations. This is higher than the advertised mortgage rate because it factors in the possibility of interest rates going up.

The lender will also look at the term of your mortgage – between 25 and 30 years is standard but shorter and longer terms are possible (many lenders will go up to 40 years) depending on your age and monthly affordability.

Your credit history will also be assessed to see how you’ve managed any borrowing in the past. It is possible to be turned down for a mortgage on the basis of a bad or even just under-par credit score, so this is something you should pay lots of attention to in the years and months leading up to your first mortgage application.

You can apply for a copy of your credit report for free at a credit reference agency, such as Experian, and take steps to improve it if necessary.

It’s a good idea to start the process of applying for a mortgage – perhaps through an independent broker, such as our partner Better.co.uk – before you begin your property search. This isn’t essential but getting a benchmark figure from the outset can be very useful – particularly if you’re new to the property buying process.

You can then ask the lender for a mortgage agreement in principle (AIP). This is effectively a statement saying it will lend you a given amount and is typically valid for between 30 and 90 days.

But, crucially, an AIP doesn’t guarantee you’ll get the mortgage – it just gives you an idea of what you might be offered and shows prospective sellers that you’re serious and not a time-waster.

Generally, mortgage lenders will carry out a soft credit check before issuing you with an AIP, which means your credit score won’t be affected. But it’s worth checking first as a full credit check will show up on your credit report.

If you find the sums just aren’t adding up, some help available to first-time buyers:

• Lifetime ISA: These accounts offer a government bonus of £1 for every £4 you save, which can be put towards buying your first home. If you save the maximum £4,000 a year, you’d get a bonus of £1,000, giving you a total of £5,000.
• Guarantor mortgage: You can ask a parent or family member to act as a guarantor which means they agree to cover any missed mortgage repayments if you fail to make them, or you’re unable to afford them over the term of the mortgage.
• Shared ownership: You buy just a share of the property, at between 25% and 75%, from a local housing association. You pay a reduced rent on the portion of the property that doesn’t belong to you – and aim to buy more shares of the home as and when you can afford to. It’s a process known as staircasing.

Note, the Help to Buy (equity scheme) closed to new applicants in October 2022. The Help to Buy ISA closed to new applicants in November 2019.

There are several different types of mortgages on offer to first-time buyers – here’s a quick look at the main contenders:

• Fixed-rate: Offers a set interest rate over a period of usually two, three, or five years. If you’re a first-time buyer, this type of mortgage may appeal as it provides the security of fixed monthly repayments that won’t change over the agreed term. Mortgages offered under the Mortgage Guarantee Scheme at 95% must all be available as five-year fixed rate deals. But there are also two- and three-year fixed rates on offer, too
• Tracker: The rate ‘tracks’ the Bank of England Base rate (interest rates) at a certain percentage above. This means monthly payments vary according to interest rate movements. Trackers usually last for between two and five years but ‘lifetime trackers’ which last for the term of the mortgage, can also be available
• Offset mortgage: These link your savings to your mortgage to ‘offset’ or reduce the overall amount you pay interest on. You won’t earn interest on your savings, but you won’t pay interest on that portion of your mortgage debt, either. However, as a first-time buyer, you are likely to want to channel all of your savings into an initial deposit. Family offsets are available however, where the savings of one or more family members can be used to offset the debt of your mortgage instead.