First-Time Buyer Guide: From Saving Your Deposit to Getting the Keys

Buying your first home is one of the biggest financial commitments you'll ever make. It's exciting, terrifying and complicated all at once. And there's no shortage of confusing jargon to wade through.

This guide walks you through the whole process from deciding you want to buy, through to walking in with the keys. Not every detail will apply to every buyer, but everything here is the kind of thing that's good to know before you start — not after.

Where to start as a first-time buyer

The very first step isn't house-hunting. It's understanding what you can actually afford and where you stand financially.

Before you do anything else:

• Check your credit score at all three credit reference agencies
• Work out your real monthly disposable income (use our take-home pay calculator)
• Add up your current savings
• Map out your monthly outgoings

You're not committing to anything yet — you're just getting a clear picture. If your credit score needs work, our credit improvement guide covers what to do. A few months of focused effort before applying can mean a much better mortgage rate.

How much deposit do you need?

The minimum is 5% of the property price. So for a £200,000 home, that's £10,000. But the bigger your deposit, the better the mortgage rate you'll be offered — and the lower the long-term cost.

Loan-to-value (LTV) is the ratio of the loan to the property price, and it's a key number in mortgages:

• 95% LTV (5% deposit): The smallest deposit most mainstream lenders accept. Rates are highest in this band.
• 90% LTV (10% deposit): More choice, better rates.
• 85% LTV (15% deposit): Noticeably better rates and a wider pool of lenders.
• 75% LTV (25% deposit): Best mainstream rates available.
• 60% LTV (40% deposit): Lowest rates on the market.

If you can save an extra few percent of the price before buying, it's usually worth doing. Our savings goal calculator can help you work out how long it'll take.

Government schemes for first-time buyers

Several government schemes can help first-time buyers — though some come and go, so check the current list at gov.uk before counting on any of them. As of writing, the main options include:

• Lifetime ISA (LISA): Save up to £4,000 a year and the government adds a 25% bonus, up to £1,000 a year. You can use the LISA to buy a first home worth up to £450,000.
• Shared ownership: Buy 25%-75% of a property and pay rent on the rest. Lower deposit needed, but you're tied to the housing association rules.
• First Homes scheme: Available in some areas, allows first-time buyers to buy a new-build at a discount of 30-50%.
• Mortgage Guarantee Scheme: Helps lenders offer 95% mortgages by providing a government guarantee — useful for borrowers with smaller deposits.

Each scheme has eligibility rules. Read the small print, and check whether your area or property qualifies before relying on one.

How much can you borrow?

Most lenders offer between 4 and 4.5 times your annual income. So if you earn £40,000, you might be offered around £160,000 to £180,000. Some lenders go higher (up to 5x or even 5.5x in special cases), and some sit at 3.5x for less straightforward applicants.

But income multiples are only half the story. Lenders also run an affordability assessment based on your outgoings, existing debts and the stress-tested cost of repayments at higher rates. Even if you "qualify" by income multiples, the affordability check can lower the amount they'll actually lend.

For a realistic estimate before you start house-hunting, use our mortgage affordability calculator. Our guide on how much you can borrow covers all this in more detail.

Getting a mortgage in principle

A mortgage in principle (AIP) is a statement from a lender saying they'd be willing to lend you up to a certain amount, subject to full application. It's not a guarantee, but it serves three useful purposes:

• It tells you what budget to actually shop within
• It signals to estate agents you're a serious buyer
• Many sellers will only accept offers from buyers with an AIP

Getting an AIP usually involves a soft credit check, takes a few minutes online, and gives you a document that lasts 60-90 days. Get one before you start booking viewings.

Finding a property

Most first-time buyers find properties through Rightmove, Zoopla and OnTheMarket, plus the windows of local estate agents. A few practical tips:

• Set up alerts for new listings in your areas of interest
• Book multiple viewings on the same day to compare directly
• View the area at different times — morning, evening, weekend
• Don't dismiss properties that have been listed for a while; sellers may have lowered expectations
• Ask the agent how long it's been on the market and whether the price has been reduced

Take notes after each viewing. After three or four, properties blur. A simple checklist helps you compare fairly.

Making an offer

Once you've found somewhere you want, the offer process in England is informal: you tell the estate agent what you're willing to pay, they pass it to the seller, the seller accepts, rejects or counter-offers.

What strengthens an offer (beyond just the amount):

• Your mortgage in principle
• Proof of deposit
• No chain (no property you need to sell)
• Flexibility on completion date
• A solicitor already lined up

Don't feel obliged to offer the asking price. Roughly 5-10% below is a common starting point in most markets. If it's a hot property in a hot area, you may need to offer at or above asking.

An accepted offer in England isn't legally binding until exchange — either side can pull out before then.

The mortgage application process

Once your offer's accepted, the full mortgage application begins. This is more involved than the AIP — the lender does a deeper credit check, verifies your income with payslips and bank statements, and confirms the property valuation.

You'll typically need to provide:

• ID (passport or driving licence)
• Proof of address (recent utility bill or bank statement)
• Three months of payslips
• Three to six months of bank statements
• If self-employed: two to three years of accounts or tax returns
• Details of your deposit source

The lender will arrange a basic valuation of the property — this is usually a tick-box exercise to confirm it's worth what you're paying. The whole application typically takes 2 to 6 weeks from submission to mortgage offer.

Conveyancing and surveys

Conveyancing is the legal process of transferring ownership. You'll need a solicitor or licensed conveyancer to handle it. Their job covers:

• Local authority searches (planning restrictions, road schemes, contamination)
• Reviewing the property's title and any covenants
• Drafting and exchanging contracts
• Handling the actual money transfer at completion

Surveys are separate. The lender's basic valuation isn't a survey — it's just confirming the property is worth what you're paying. As the buyer, you should commission your own survey. Options range from a basic HomeBuyer Report (around £400-£800) to a full Building Survey (£600-£1,500+) for older or unusual properties.

Yes, a survey costs hundreds of pounds. Yes, it might find issues that scare you. But spending £800 to discover a £30,000 roof problem before you commit is the best money you'll ever spend.

Stamp duty for first-time buyers

First-time buyers in England and Northern Ireland get a chunky discount on stamp duty. As of writing:

• No stamp duty on properties up to £425,000
• 5% on the portion from £425,001 to £625,000
• Above £625,000: full standard rates apply with no first-time-buyer relief

Scotland (LBTT) and Wales (LTT) have their own equivalents with different thresholds and bands. Our stamp duty calculator handles all four nations and shows you the exact bill.

Exchange and completion

These are the two big moments at the end of the process:

Exchange of contracts is when the purchase becomes legally binding. Your solicitor and the seller's solicitor sign and swap signed contracts. At this point you typically pay your deposit (the buyer's deposit — usually 10% of the purchase price, paid via your solicitor) and agree the completion date.

Completion is when the money is transferred and you get the keys. Your mortgage funds and remaining deposit go to the seller. Their solicitor confirms receipt. The estate agent rings you to say the keys are ready.

Most exchanges and completions happen one to four weeks apart, but they can be on the same day for simple cases.

Costs first-time buyers often forget

Beyond the deposit and stamp duty, the main extras to budget for:

• Solicitor fees: £800-£2,000 for a typical purchase
• Survey: £300-£1,500 depending on depth
• Mortgage arrangement fee: £0-£2,000 (often optional — you can usually pay a higher rate instead)
• Land Registry fees: £40-£500 depending on price
• Buildings insurance: required from exchange day; budget £200-£400 a year
• Removal costs: £400-£1,500 for a typical first-time buyer's amount of stuff
• Bills setup: first month's worth of council tax, utilities, broadband

All in, it's reasonable to budget around 2-3% of the property price for these costs on top of deposit and stamp duty. Underbudgeting here is one of the most common mistakes. Plan for it now and you'll get to completion day without nasty surprises.

Frequently asked questions