First-Time Buyer Mortgage Guide 2026: Deposits, Schemes & Steps
Everything you need to know about getting on the property ladder in the UK, from saving a deposit to picking up the keys.
Quick Summary
How Much Can I Borrow?
Most UK mortgage lenders will let you borrow between 4 and 4.5 times your annual gross salary. Some specialist lenders may stretch to 5 or even 5.5 times for higher earners or certain professionals like doctors, solicitors, and accountants. If you are buying with a partner, lenders typically combine both incomes.
However, the amount you can actually borrow depends on more than just your salary. Lenders run affordability assessments that factor in your regular outgoings, existing debts, childcare costs, and living expenses. They also stress-test your ability to keep up payments if interest rates were to rise by several percentage points.
| Annual Salary | Max Mortgage (4x) | Max Mortgage (4.5x) | Property Budget (10% deposit) |
|---|---|---|---|
| £30,000 | £120,000 | £135,000 | £133,333 - £150,000 |
| £40,000 | £160,000 | £180,000 | £177,778 - £200,000 |
| £50,000 | £200,000 | £225,000 | £222,222 - £250,000 |
| £60,000 | £240,000 | £270,000 | £266,667 - £300,000 |
| £80,000 | £320,000 | £360,000 | £355,556 - £400,000 |
Want to see exactly how much of your salary goes towards tax, NI, and pension? Use our mortgage calculator to estimate monthly repayments, and our take-home pay calculator to understand your disposable income.
How Much Deposit Do I Need?
You will typically need at least a 5% deposit to buy a home in the UK, though putting down 10% or more opens up significantly better mortgage rates. The more you can save, the lower your loan-to-value (LTV) ratio will be, and lenders reward lower LTV with cheaper interest rates.
For example, a buyer with a 25% deposit (75% LTV) might get an interest rate a full percentage point lower than someone with a 5% deposit (95% LTV). Over a 25-year term, that difference can add up to tens of thousands of pounds in saved interest.
| Property Value | 5% Deposit | 10% Deposit | 15% Deposit | 20% Deposit |
|---|---|---|---|---|
| £200,000 | £10,000 | £20,000 | £30,000 | £40,000 |
| £250,000 | £12,500 | £25,000 | £37,500 | £50,000 |
| £300,000 | £15,000 | £30,000 | £45,000 | £60,000 |
| £350,000 | £17,500 | £35,000 | £52,500 | £70,000 |
| £400,000 | £20,000 | £40,000 | £60,000 | £80,000 |
A larger deposit not only reduces your monthly payments but also gives you access to more competitive rates. Aim for at least 10% if possible, and 15-20% to unlock the best deals on the market.
Government Schemes for First-Time Buyers
The UK government runs several schemes to help first-time buyers get on the property ladder. These can make a significant difference, particularly if you are struggling to save a large deposit or facing high property prices in your area. Here is a summary of the main options available in 2026.
| Scheme | How It Works | Max Benefit |
|---|---|---|
| Lifetime ISA | Save up to £4,000/yr, government adds 25% bonus | Up to £1,000 free per year |
| Shared Ownership | Buy 25-75% of a property, rent the rest | Lower deposit needed |
| First Homes | 30% discount on new-build homes for local first-time buyers | Permanently discounted price |
| Mortgage Guarantee Scheme | Government backs 95% LTV mortgages from participating lenders | Buy with just 5% deposit |
For full details and eligibility criteria, visit the GOV.UK affordable home ownership schemes page. The Lifetime ISA is particularly popular because you can open one from age 18 and build up a substantial deposit over several years with the government bonus.
Stamp Duty for First-Time Buyers
First-time buyers in England and Northern Ireland benefit from generous stamp duty relief. Under current rules, you pay no stamp duty at all on the first £425,000 of a property purchase, as long as the total purchase price does not exceed £625,000. This temporary relief threshold was raised from £300,000 and is a significant saving compared to what other buyers pay.
If you are buying a property between £425,001 and £625,000, you pay 5% stamp duty only on the portion above £425,000. If the property costs more than £625,000, you lose the first-time buyer relief entirely and pay standard rates instead.
| Property Price | First-Time Buyer Stamp Duty | Standard Stamp Duty | You Save |
|---|---|---|---|
| £250,000 | £0 | £0 | £0 |
| £350,000 | £0 | £5,000 | £5,000 |
| £425,000 | £0 | £8,750 | £8,750 |
| £500,000 | £3,750 | £12,500 | £8,750 |
| £625,000 | £10,000 | £18,750 | £8,750 |
Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT) with their own rates and thresholds. For the latest rates, check GOV.UK stamp duty land tax.
Step-by-Step: Buying Your First Home
The process of buying your first property can feel overwhelming, but breaking it down into clear steps makes it much more manageable. Here is the typical timeline from start to finish, which usually takes around three to six months once you have your deposit saved.
Check your affordability
Work out how much you can borrow based on your salary (4-4.5x) and how much deposit you have. Use our mortgage calculator to estimate monthly payments and make sure they fit comfortably within your budget after tax, bills, and other outgoings.
Save your deposit
Aim for at least 10% of the property value. Consider a Lifetime ISA for the 25% government bonus. Cut unnecessary expenses and direct any pay rises or bonuses straight into your deposit fund.
Get an Agreement in Principle (AIP)
An AIP is a conditional offer from a lender confirming how much they would be willing to lend you. It is based on a soft credit check and shows estate agents you are a serious buyer. Most AIPs are valid for 60 to 90 days.
Find your property
Search on Rightmove, Zoopla, and OnTheMarket. Visit properties in person, check the local area at different times of day, and research council tax bands, broadband speeds, and flood risk before committing.
Make an offer
Research comparable sold prices in the area to determine a fair offer. Your estate agent will negotiate on the seller's behalf. In England and Wales, offers are not legally binding until contracts are exchanged.
Instruct a solicitor or conveyancer
Your solicitor handles the legal side of the purchase, including property searches, reviewing the title deeds, and managing the transfer of funds. Get quotes from several firms and check they are on your lender's approved panel.
Full mortgage application
Submit your full application with payslips, bank statements, ID, and proof of deposit. The lender will carry out a valuation survey on the property. This stage typically takes two to four weeks.
Exchange and complete
At exchange, you pay your deposit (usually 10%) and the sale becomes legally binding. Completion typically follows one to four weeks later, when the remaining funds transfer and you get the keys to your new home.
Hidden Costs to Budget For
Your deposit and monthly mortgage payments are just the beginning. There are several additional costs that catch many first-time buyers off guard. Make sure you budget for these on top of your deposit so you are not left short at the crucial moment.
| Cost | Typical Range |
|---|---|
| Solicitor / conveyancer fees | £1,000 - £2,000 |
| Property survey | £300 - £1,500 |
| Mortgage arrangement fee | £0 - £2,000 |
| Moving costs | £500 - £1,500 |
| Buildings insurance | £200 - £500 |
In total, you should budget an extra £3,000 to £7,000 on top of your deposit. Some of these costs, like the mortgage arrangement fee, can sometimes be added to the loan, but this means you pay interest on them over the full mortgage term.
Calculate Your Mortgage Repayments
Ready to see what your monthly payments could look like? Try our free mortgage calculator and work out exactly what you can afford.
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