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.
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.
| 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.
| 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
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.
Variable-rate mortgages (including trackers and standard variable rates) can go up or down with the Bank of England base rate. 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
- Arrangement fees: Typically £500–£2,000
- Valuation fees: £150–£1,500 depending on property value
- Solicitor/conveyancing fees: £800–£1,800
- Stamp Duty Land Tax: 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 will open up significantly better deals.
What is a mortgage in principle?
A mortgage in principle (MIP) 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.
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, and many brokers are fee-free (paid by the lender instead).
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
- Salary Calculator — Work out your take-home pay and affordability