First-time home buyers First-time buyer mortgages

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First-time buyer mortgages tend to require smaller deposits 

Typically, first-time home buyers will have a small deposit to put towards their first mortgage. Here, we explain what this means for the type of mortgage you'll be able to get.

Generally speaking, the smaller the deposit, the higher rate of interest will be charged by the mortgage lender. This is because the lender will view the deal as presenting a higher risk to them.

The smallest deposit you can usually use to get a mortgage in the current market is 5%. However, the 2015 Which? Property Survey found that the average first-time buyer deposit is 17%.

Best mortgages for first-time buyers

Realistically, to get a good mortgage deal you will need to be able to put forward at least a 20% deposit. 

A higher deposit of 30% to 40% or above will allow you to qualify for the cheapest deals on the market. This is because, if you had difficulty repaying your mortgage and your home was repossessed, the lender would be able to recoup the majority of the amount borrowed. 

Getting a mortgage for the first time can be daunting. With so many options to consider, it's hard to know how much mortgage you can afford and what the process will be.

Which? Mortgage Advisers is an impartial mortgage broker service that focuses on finding the right mortgage for you and your personal circumstances. The expert team will guide you through the whole process right up until you get the keys to your new home. Call our expert advisers on 0808 252 7987.

90% mortgages

A 90% 'loan to value' mortgage requires a 10% deposit of the property. This means for a property worth £150,000 you would need a deposit of £15,000. Many first-time buyers will look at taking out this type of mortgage, however interest rates offered will be higher than with a lower loan-to-value mortgage 

Do your research first by finding out what a mortgage lender will let you borrow.

95% mortgages

A 95% mortgage will normally come with a much higher rate of interest, which in turn will increase the amount you have to repay each month. To qualify for this type of deal you will need to demonstrate a good credit record and have sufficient income. 

However, the Help to Buy scheme means that you can buy a property with a 5% mortgage and then borrow some money from the government, meaning your mortgage loan is smaller. 

For more information see our video guide, Help to Buy scheme explained.

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Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.