Getting a mortgage for the first time can feel overwhelming. Between deposits, interest rates, LTV ratios, and monthly repayments, there’s a lot to get your head around before you even speak to a lender. This guide breaks everything down in plain English — so you know exactly what to expect and how to get the best deal possible.
What Is a Mortgage?
A mortgage is a loan secured against a property. You borrow money from a lender to buy a home, then repay that loan — plus interest — over an agreed term, typically 25–35 years. The property itself acts as security, which means if you stop making repayments, the lender can repossess it.
Each monthly mortgage payment covers two things: the interest charged on your outstanding balance, and a portion of the principal (the actual loan). Early in the mortgage, most of your payment goes to interest. Towards the end, most goes to repaying the principal.
How Much Can You Borrow?
Most UK lenders will offer between 4 and 4.5 times your annual income. For joint applications, this is based on combined income. Some lenders offer up to 5× income for higher earners or certain professions. However, the exact amount depends on affordability checks — your income, outgoings, credit score, and existing debts all factor in.
| Annual Income | 4× Multiplier | 4.5× Multiplier | 5× Multiplier |
|---|---|---|---|
| £30,000 | £120,000 | £135,000 | £150,000 |
| £40,000 | £160,000 | £180,000 | £200,000 |
| £55,000 | £220,000 | £247,500 | £275,000 |
| £70,000 | £280,000 | £315,000 | £350,000 |
| £100,000 | £400,000 | £450,000 | £500,000 |
Use our mortgage calculator to see exactly what your monthly repayments would be at different borrowing amounts and interest rates.
How Much Deposit Do You Need?
The minimum deposit for most UK mortgages is 5% of the purchase price. However, a larger deposit significantly improves the rates available to you — and reduces your monthly payments. Here’s how deposit size affects your Loan-to-Value (LTV) ratio and the deals you can access:
| Deposit | LTV | Typical Rate | Monthly Cost (£200k, 25yr) |
|---|---|---|---|
| 5% (£10,000) | 95% | ~5.5–6% | ~£1,280–£1,332 |
| 10% (£20,000) | 90% | ~4.8–5.2% | ~£1,147–£1,198 |
| 20% (£40,000) | 80% | ~4.2–4.6% | ~£1,071–£1,111 |
| 25% (£50,000) | 75% | ~3.9–4.3% | ~£1,040–£1,071 |
| 40% (£80,000) | 60% | ~3.5–3.9% | ~£982–£1,010 |
Fixed vs Variable Rate Mortgages
One of the biggest decisions you’ll make is whether to choose a fixed-rate or variable-rate mortgage.
Fixed-rate mortgages lock your interest rate for a set period — usually 2, 3, or 5 years. Your monthly payment stays exactly the same throughout, making budgeting straightforward. The downside is that if rates fall, you’re stuck on the higher rate until your deal ends.
Variable-rate mortgages (including trackers and standard variable rates) can go up or down with the Bank of England base rate. When rates are falling, this works in your favour. When they’re rising, your payments increase — sometimes significantly.
For most first-time buyers, a 2 or 5-year fixed rate provides the stability needed to budget reliably in the early years of homeownership.
The True Cost of a Mortgage
The headline rate and monthly payment are only part of the story. When evaluating the true cost of a mortgage, include:
- Arrangement fees: Typically £500–£2,000. Sometimes worth paying for a lower rate on larger loans
- Valuation fees: £150–£1,500 depending on property value
- Solicitor/conveyancing fees: £800–£1,800
- Stamp Duty Land Tax: Variable — first-time buyers pay no SDLT on the first £425,000
- Broker fee: Some brokers charge £300–£500; many are fee-free
First-Time Buyer FAQ
Can I get a mortgage with bad credit?
Yes, but your options are more limited and rates will be higher. Specialist lenders cater to those with CCJs, missed payments, or low credit scores. Improving your credit score before applying — by paying down debts, registering on the electoral roll, and not applying for new credit — will open up significantly better deals.
What is a mortgage in principle?
A mortgage in principle (MIP) — also called an agreement in principle — is a conditional offer from a lender stating how much they’d be willing to lend, based on a soft credit check. It’s not a guaranteed offer, but it shows sellers you’re a serious buyer and gives you a realistic budget to search with.
How long does the mortgage application process take?
From application to completion, the mortgage process typically takes 4–8 weeks. This includes the full mortgage application, property valuation, legal work, and exchange of contracts. Using a mortgage broker can speed this up by ensuring your application is submitted correctly the first time.
Should I use a mortgage broker?
For most first-time buyers, yes. A whole-of-market broker has access to deals not available directly to consumers, can advise on which lenders are most likely to accept your application, and handles most of the paperwork. Many brokers are fee-free (paid by the lender instead).
Before meeting a broker or lender, use our mortgage calculator to understand what your monthly payments would look like at different rates and terms — so you go into the conversation informed.
Related Calculators
- Mortgage Calculator — Calculate monthly payments at any rate and term
- Savings Calculator — Plan how long it will take to save your deposit
- Loan Calculator — Compare personal loan costs alongside mortgage costs
- Salary Calculator — Work out your take-home pay and affordability