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Find the Best Mortgage Deals for First-Time Buyers

Buying your first home should be fun – not frightening. It’s easy to see why some people can feel overwhelmed though.

There are many different terms thrown at you from the second you start looking at mortgages – repayment mortgage, fixed rate, standard variable rate, etc. - not to mention the fact that you might not know much about the property buying process in general.

You don’t have to figure it all out by yourself. Not only do we find you the best mortgage deal for your situation, we explain the different mortgage options available to you as a first-time buyer and assist you at every stage of your home buying journey.


Who Qualifies for a First-Time Buyer Mortgage Deal?

Unsure whether or not you're eligible as a first-time buyer? It isn't always as simple as you might expect.

You’re a first-time buyer if you have never owned or required a major interest in a residential property or land in the UK or anywhere else in the world.

Find a great deal for first home buy using a John Charcol mortgage adviser experienced in first-time buyer mortgages.

You’re not a first-time buyer if: 

  • You own another residential property anywhere in the world
  • You have ever owned another residential property anywhere in the world
  • You inherited a property, even if you never lived in it, and have sold it
  • You own, or have owned, a commercial property with living quarters attached

It’s worth noting that you won’t be eligible for certain first-time buyer benefits if:

  • You're taking out a joint mortgage with someone who has owned a residential property (you may still qualify for some benefits if you’re a first-time buyer taking out a joint borrower sole proprietor mortgage with an immediate family member)
  • You’re having a parent or guardian who owns their own home buy this property for you

If you're not a first-time buyer you won’t qualify for exclusive first-time buyer mortgage deals. Nonetheless, this doesn’t mean you won’t get a competitive rate - a lot of products available to first-time buyers are available to homeowners, it’s just a few that are exclusive. Therefore, our expert brokers can still help you find a great mortgage deal that suits your needs.


Things to Know When Buying Your First Home

Ready to become a homeowner? Here's some first-time buyer mortgage advice to get you started.

How Mortgages Work

  • A mortgage is a loan you take out with a lender for a number of years
  • The length of time over which you have a mortgage is called your “mortgage term”
  • Mortgage terms can be anywhere between 5 and 40 years
  • A mortgage is a type of secured loan, which means it’s secured against a property - usually the property you want to buy with the mortgage
  • Using a property as security for a loan means that the lender can repossess it if you don’t keep up the mortgage payments
  • To take out mortgage, you must put down a mortgage deposit of at least 5% of the purchase price – the mortgage itself makes up the rest

About Interest Rates

  • When you take out a mortgage, you’re given an introductory interest rate for the first few years – typically between 2 – 5 years
  • A popular kind of interest rate for first-time buyer mortgages is a fixed rate, which is where interest is charged at a set rate for a certain period. Fixed rates are particularly good for those who like to budget and favour stability in their monthly payments
  • After the introductory period ends, you’re transferred onto your lender’s SVR (standard variable rate), which is the interest rate they set themselves
  • The lender’s SVR is normally higher than the introductory rate, so you would often remortgage onto a new product with a new lender or switch to a new product via a product transfer with your existing lender when your introductory deal ends

Paying Back Your Mortgage

  • You pay back your mortgage with interest
  • There are 2 main types of mortgage which determine how you pay the lender - repayment and interest-only
  • With a first-time buyer repayment mortgage, you pay back a bit of the outstanding mortgage balance – i.e. the amount you borrowed -  each month alongside interest payments
  • With an interest-only mortgage, you only make interest payments each month and repay the full mortgage at the end of the mortgage term. As a first-time buyer, you wouldn't typically opt for an interest-only mortgage. These mortgages are more commonly used by buy-to-let landlords

Choosing Your First-Time Buyer Mortgage Deal

When choosing your first mortgage, there are various elements that you need to factor in:

  1. You must find how much you can borrow. - the amount that you can borrow will depend on your income and outgoings and the deposit you have to put down. Our first-time buyer mortgage calculator will give you an idea of how much you can borrow
  2. Calculate the deposit you can afford - a typical deposit will be at least 5% of a property’s value. However, if you’re able to save more than this, it can open up mortgages with competitive rates as you’ll be considered a lower risk. Learn more about how to buy your first home with a small deposit in our guide
  3. Don’t forget other costs - alongside saving for a deposit, you’ll also need to save up for other costs - including legal fees and moving costs
  4. Understand different mortgage types - it’s important to understand the different types of first-time buyer mortgages and how they work to ensure you pick the best deal for you and your needs. If budgeting is important to you, a fixed rate mortgage could be the best option. If you’re not averse to mild monthly payment fluctuations and you favour flexibility, you might prefer a variable rate deal
  5. Calculate how much repayments will be every month - the mortgage you choose must be affordable, so you’ll need monthly payments that don’t stretch your finances. The longer your mortgage term, the less you’ll pay each month, but the higher the interest you’ll end up paying and vice versa

Keep reading to compare the best mortgage deals for first-time buyers that are currently on the market, find information on the homebuying process and for answers to some of your main FAQS.

Or, see our First-Time Buyer’s Guide if you need a little more help understanding mortgages and how they work for first-time buyers.

You can also learn about the different types of mortgages and interest rates.


John Charcol Expert Tip - February 2024

Lenders are constantly innovating new products to assist first-time buyers in overcoming the primary obstacles of affordability and the deposit required to enter the property market. Given the intricate nature and diversity of these products, it is highly advisable for first-time buyers to consult with a mortgage broker. A knowledgeable broker, such as John Charcol, can comprehensively understand your circumstances and ensure you are aware of all the available options. Seeking guidance ensures that first-time buyers can navigate these offerings effectively and make informed decisions about their journey onto the property ladder.

Notable products include joint borrower sole proprietor which can boost your maximum borrowing and improve your affordability, and Family Springboard Mortgages which can help first-time buyers overcome the challenges with saving a deposit.

Mortgage Technical Manager Nick Mendes, CeMAP qualified

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Which Type of First-Time Buyer Mortgage Rate Is Best for Me?

There are many different options for first-time buyer mortgages, including the below.

Types of Mortgage Rates for First-Time Buyers

  • Fixed rate mortgage - fixed-rate mortgages give you a set rate of interest for the first few years of your mortgage, often 2 - 5. This makes it easier to know how much your monthly payments will be, helping you plan your finances better. They can also have lower interest rates than variable rate mortgages
  • Tracker mortgages - tracker mortgages are a type of variable rate mortgage. Trackers stay a set percentage above the Bank of England Base Rate and move in line with it. This means that as the Base Rate drops or increases, your interest rate will do the same

  • Discount rates mortgages -  are another type of variable rate mortgage. Discounted variable rate mortgages are a set percentage under the lender’s SVR (standard variable rate) and move in line with it. One thing to bear in mind with discount rates is that you won’t know if the lender’s going to raise or lower their SVR, which can make them more unpredictable


What Different Mortgage Setups and Home Loan Schemes Are There for First-Time Buyers?

There are various schemes that can help a first-time buyer get a mortgage. As a mortgage broker for first-time buyers we will be able to guide you through what schemes you might be able to take advantage of, such as:

  • Joint mortgage - many first-time buyers may opt to get a joint mortgage with another person - such as a partner - or a family member. With a joint mortgage, all borrowers are assessed for affordability, which can enable you to borrow more on your mortgage than if you applied by yourself; are jointly responsible for meeting the mortgage payments and are on the title deeds of the property
  • Joint borrower sole proprietor - this lets you get a joint mortgage with someone else, such as a parent, but allows you to maintain sole ownership of the property. This means that you may be able to borrow more by using the joint income of you and your parents. Your parent will also be jointly liable for the mortgage payments
  • Offset mortgages - offsets let you use savings to reduce the amount of interest you’re charged on your mortgage
  • Family Springboard and Family Assist mortgages - more lenders are offering products nowadays that allow you to buy a house without providing a deposit in the traditional sense. Instead, a family member puts money into a savings account or uses equity in their property as security, enabling you to borrow up to a 100% of a property’s value
  • First Homes Scheme - this allows first-time buyers to purchase a new build home at a discount, at the discretion of their local council. The lower price makes it easier for buyers to get a mortgage without worrying about affordability
  • Mortgage Guarantee Scheme - although this scheme is technically aimed at supporting lenders, it benefits first-time buyers as it helps lenders offer mortgages with a 5% deposit on properties valued up to £600,000
  • Track Record Mortgage - Skipton are now offering a 100% LTV mortgage for first-time buyers who have a track record of meeting their rental payments for at least 12 months in a row. With the Track Record Mortgage you could borrow up to £600,000

These are just some of the options available. As a first-time buyer, it can be confusing to look at the different types of mortgages and stressful deciding which is the best one. Our first-time buyer mortgage advisers are happy to guide you in the right direction, towards the mortgage that suits you best.


What Deposit Do I Need for a First-Time Buyer Mortgage?

Most mortgage providers will require a deposit of at least 5% of the property's value. It's possible to find some 0% deposit mortgages, but these tend to come with certain additional caveats that may require alternative security or may limit your maximum borrowing.


What Schemes Are Available to Help First-Time Buyers Save a Deposit?

  • Lifetime ISA - the Lifetime ISA is a way to boost your deposit and reach your goal quicker. Essentially, you open a savings account into which you can deposit up to £4,000 per year. The Government will then give you a 25% bonus on top of this amount (up to £1,000 per year) if you use the account for a deposit on your first home

  • Shared ownership - this government scheme lets you purchase a percentage of a property, paying rent on the rest. This reduces how much you need to borrow and how much you need to save in deposit, making homeownership accessible to more people

How Can John Charcol Help First-Time Buyers?

We Take Care of Everything

With nearly 50 years of service, we've seen it all. We can save you money, time and make buying your property easy.

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We Give Personal, Expert Advice

We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.

Process for Buying a Home

1. First Conversation with Adviser

When you phone us, you can either arrange a phone appointment with your adviser, a video call or an in-person – whatever suits you. Your adviser will ask you some questions then go away and find you the best deal for your circumstances and future needs. They’ll organise a follow up during which they’ll present you with what they’ve found.

2. Decision in Principle

Once you’re happy with your adviser's recommendation, they’ll go about securing your DIP (Decision in Principle) - which is basically a promise from the lender that they’ll loan you money on the condition that the information you’ve provided is correct and subject to a valuation of the property.

3. Offer on Property

After you’ve secured a DIP (Decision in Principle), you’ll be in a great position to make an offer on a property. Sellers like DIPs. They show you can afford the purchase. What’s more, the fact that you’ve already started preparing for the transaction highlights to them that you’re serious in your intention to buy.

4. Pre-Application and Submission

Following the acceptance of your offer, we’ll send you some information which explains all the documents we need to submit to the lender. You’ll be assigned a client relationship manager who’ll check and submit certified copies of your documents; they’ll liaise with both you and the lender. Your adviser will then submit the fully packaged mortgage application.

5. Lender Underwriting and Valuation

The lender will underwrite your application; this basically means they’ll verify that the information you’ve provided is correct and review all your documents for themselves. They’ll also instruct a valuation for their purposes on the property you want to buy to make sure there are no significant problems with it.

6. Mortgage Offer

If the lender is happy with everything they’ve found, they’ll send you a mortgage offer. They’ll also send us a copy.

7. Conveyancing

After you’ve accepted your mortgage offer, you’ll go through the legal part of the process, known as conveyancing. This is where the solicitors/conveyancers draw up contracts and organise the actual, legal purchase of the property. You’ll also need to arrange buildings insurance at this stage, making sure it’s in place from exchange. You'll typically need a conveyancing solicitor to help you.

8. Exchange and Completion

Once everything is in place, your conveyancer/solicitor will exchange contracts with the seller’s conveyancer/solicitor. It’s at this point that you put down your deposit and are legally bound to buy the property. You’ll lose your deposit if you pull out after exchange. The purchase completes when money is transferred on an agreed-upon date. This is when you get the keys to your new home.


First-Time Buyer Resources

How Much Can I Borrow?

This mortgage calculator examines your income and works out how much money a mortgage lender might provide you with

Buying Your First Home

From the definition of a first-time buyer, through the steps to buying a property and the costs you’ll face - everything you need to know is in our guide.

Applying for a Mortgage

Applying for a mortgage couldn’t be simpler with our easy and simple guide from application to accepting your offer.

What Is a First-Time Buyer?

Learn all about what it means to be a first-time buyer, how the process works and how the first-time buyer status is determined.

Your First Mortgage Appointment

Your first mortgage adviser appointment can be overwhelming. Learn all you need to know and what you need to be prepared for prior to your first conversation.

Stamp Duty for First-Time Buyers

How does Stamp Duty for first-time buyers work? Learn all you need to know here. We explain what Stamp Duty is, how much first-time buyers pay, rates and more.

First-Time Buyer Costs

Learn about the different first-time buyer costs when buying property and moving house. Start your journey here with our first-time buyer costs checklist.

The Bank of Mum and Dad – How to Help Your Children Buy a Home

With many prospective buyers turning to the bank of mum and dad, learn about some of the ways parents can support their children in buying a home.

How to Get a Student Mortgage

Can you get a student mortgage? Here we explain what a student mortgage is, how to get one, whether your student loan affects your mortgage and other options.

House Buying Mortgage Guide

Are you looking to buy your first home? Or perhaps want to move to a new area? Our step-by-step guide will tell you everything you need to know about buying a house.

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    Daniel Spragg recently helped me with a new mortgage and a life insurance product. I was absolutely delighted with the level of service provided from Daniel. From minute one, he was attentive, very knowledgeable and did exactly what he promised, which is all that can be asked for of any professional service. During the period on waiting for the mortgage to be approved, he gave regular updates and always kept me in the loop. I would not think twice about using them in the future.

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    I have just completed on my house purchase and am delighted with the service I received from Victoria Todd at John Charcol. This is the second time I have asked for her help, and on each occasion she went the extra mile to deliver prompt, excellent advice. We had to change the requirements halfway through, and she has always been able to adapt or make helpful suggestions. The team also put me in touch with other support on the house sale, all good advice and service from their partners too. I would have no hesitation in recommending Victoria and John Charcol services, their professionalism will get you through the stress of UK house buying!

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    David Pundey, I want to extend my heartfelt thanks to you for the exceptional guidance and support you provided throughout my mortgage application process. Your expertise and dedication in addressing every issue that arose were truly invaluable. From the very beginning, you offered clear and insightful advice, ensuring that I understood each step of the process. Whenever challenges came up, you were quick to find effective solutions, which greatly eased my concerns. Your professionalism and responsiveness made a significant difference, and I am very happy with the service you provided. Thank you once again for your outstanding assistance.

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JC Legal

With JC Legal, John Charcol can refer you to a solicitor who’ll manage the conveyancing part of the process. We choose from a carefully selected panel of conveyancers and solicitors, giving you access to a variety of quotes, services and options.

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Concierge

We can help you move into your property, set up utilities, register for Council Tax and more with our Concierge Service – available through Just Move In. They organise everything for you, saving most people around £300 a year and up to 8 hours of hassle.

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Home Insurance

You'll need buildings insurance in place from exchange. We can find you buildings and contents insurance through our partnership with Legal & General.

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Protection

We can organise bespoke life assurances for you by selecting from our superb panel of providers. The best part? We charge no arrangement fees for this service.

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First-Time Buyer Mortgage FAQs

Can I Get a Mortgage as a First-Time Buyer with Bad Credit?

It’ll be a lot harder to get a mortgage as a first-time buyer with no credit or a bad credit history unless you have a large deposit. There are ways you can improve your credit score and overall profile though.

Can I Get an Interest-Only Mortgage as a First-Time Buyer?

It is possible to get an interest-only residential mortgage as a first-time buyer, but you must be able to prove how you’ll repay the outstanding mortgage balance at the end of the mortgage term. Lenders typically reserve interest-only deals for higher rate taxpayers and/or those with substantial deposits.

How Much in Mortgage Deposit Do I Need to Buy My First Home?

The minimum deposit you need for a mortgage is 5% - 10%. Nowadays, there are a few no deposit mortgages which let you borrow the entire cost of the property's purchase price and use savings or equity as security. Usually, the more you can put down in deposit, the better the deals available to you.

Are There Any 0% Deposit Mortgages for First-Time Buyers?

The minimum deposit required for a mortgage is 5%. However, there are products such as the Family Springboard mortgage and the Family Assist mortgage. With these kinds of products, you can take out a mortgage that’s up to 100% of the property’s purchase price. At the same time, a family member opens a savings account with the lender that’s linked to the mortgage. The family member will then put at least 10% of the purchase price into this savings account as security on the mortgage, thereby essentially providing a deposit. Alternatively, instead of using savings some products allow family members to use equity in their own property as security for the mortgage.

Several lenders offer similar mortgages under different names.

Do Any Lenders Offer 80% or 90% Mortgages to First-Time Buyers?

Lenders do offer products at 80% or 90% LTV (loan-to-value) to first time buyers as well as all other homebuyers.   

Can I Get a First-Time Buyer Mortgage?

If you’ve never previously owned a property in the UK or anywhere else in the world, then you can apply for a first-time buyer mortgage. It doesn’t matter if you’re buying alone or as a couple, if neither partner has ever bought a home before, you’ll be counted as first-time buyers. See the definition of a first-time buyer and whether you qualify.

If you’ve inherited property in the past, then you cannot apply for a first-time buyer mortgage. Despite the fact you’d be buying a house for the first time, rules state you must never have owned a property before.

However, if you’re a commercial property owner - e.g. you own a shop or restaurant - but never owned a residential property, you’ll still be considered a first-time buyer.

Do I Qualify as a First-Time Homebuyer?

To qualify as a first-time buyer, you must have never acquired a major interest in a residential property or land in the UK or anywhere else in the world. We explain what it means to be a first-time buyer and the benefits in our First-Time Buyer’s Guide.

Does Being a First-Time Homebuyer Affect My Mortgage?

Nowadays, lenders tend to offer their best products to all borrowers, so don’t limit yourself to “first-time buyer products” only.

You may find that a lender has a specific product that they only offer to first-time buyers, but often you will find that another lender has a very similar alternative that they offer to a wider range of borrowers.

Who Are the Best Mortgage Lenders for First-Time Buyers?

No one lender is the ultimate first-time buyer mortgage provider. Lenders offer all kinds of products and rates. What suits you best will depend on your situation and needs. If you’re not sure what you’re looking for, give us a no obligation call and speak to an adviser on 0330 433 2927.

Why Use a Mortgage Broker for My First-Time Buyer Mortgage?

Finding your first mortgage can be a challenging experience, especially with the various types of mortgages and deals available. Our mortgage brokers can advise you on the available options and will find you the best deal based on your individual circumstances. We’ll also guide you through the application process to ensure a smooth experience. What’s more, by using us as your first-time buyer mortgage broker, we can help you set up utilities and even move into your new home.

What Is a Guarantor Mortgage?

Guarantor mortgages are where someone else – usually a family member – acts as a guarantor. This means that they agree to make the monthly payments if you fail to do so for any reason. The guarantor has to be assessed for affordability just as you would be. Guarantor mortgages aren't offered much these days, but there is a similar mortgage option called Joint Borrower Sole Proprietor (JBSP). In a JBSP mortgage, you can have someone else on the mortgage loan as a borrower, but they aren't on the title deeds for the property.

A guarantor mortgage or JBSP lets first-time buyers get help from parents or other family members when it comes to buying a home.

What Is Shared Ownership?

Shared ownership is where you buy a percentage of a property. Usually, this is an arrangement you make with a housing association or local authority. This can make it cheaper to get onto the property ladder because you don't have to buy the whole property and you need less in deposit. However, you would have to pay rent on the remaining percentage of the property that you do not own. You can slowly pay off more until you own the property outright.

What Is a Joint Mortgage?

A joint mortgage allows multiple people to apply for a mortgage to buy a property together. Everyone on the application form will have to be assessed for affordability and credit history. As well as this, they will all be responsible for making payments and will all be on the title deeds.

If one person fails to make a payment, the other people on the mortgage will have to make sure the payment is made on time. Joint mortgages are often done with a parent and child on the application so that the parent can help the child borrow more money on the mortgage and get onto the property ladder.

What Is a Loan-to-Value Ratio (LTV)?

The LTV (loan-to-value) ratio shows how much of a property's value you are borrowing on a mortgage. A 90% LTV ratio means that you're taking out a mortgage for 90% of the property's value. The other 10% would be covered by the deposit that you pay. Lenders often give better deals and lower interest rates to applicants with high deposits and lower LTVs.