First-Time Buyer Mortgage Guide: Steps, Costs and Stamp Duty

The steps in order

1. Work out a budget. Look at income, outgoings and what you could still afford if interest rates rose or your income fell.
2. Save the deposit. Most deals need at least 5%. See how much deposit you need.
3. Check your credit report. Correct errors and understand any missed payments before a lender sees them.
4. Get a mortgage in principle. It gives a realistic idea of what you could borrow. See mortgage in principle explained.
5. Find a property and make an offer.
6. Apply for the mortgage in full. You prove identity and income, and the lender values the property.
7. Instruct a solicitor or conveyancer to handle the legal work, including searches.
8. Exchange contracts and complete. The sale becomes legally binding at exchange, and you collect the keys on completion.

Costs to plan for

• The deposit.
• Stamp Duty Land Tax, where it applies.
• Solicitor or conveyancer fees.
• A survey, in addition to the lender's valuation.
• Mortgage fees, if the deal has them.
• Removals and furnishing the home.
• An emergency fund.

Stamp Duty for first-time buyers

In England and Northern Ireland, first-time buyer relief applies if you and anyone buying with you are all first-time buyers and the property is your first home:

| Portion of the price | Rate | |---|---| | Up to £300,000 | 0% | | £300,001 to £500,000 | 5% | | Over £500,000 | No relief; standard rates apply |

Standard rates apply if relief is not available. Stamp Duty explained covers all the rates, and the Stamp Duty calculator works out the figure for a price. Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax) have their own rules, so check the relevant government site.

Lifetime ISAs

A Lifetime ISA is one way to save for a first home. In 2026/27 you can open one between ages 18 and 39 and pay in up to £4,000 a year, and the government adds a 25% bonus of up to £1,000 a year. The home must cost no more than £450,000, and you only receive the bonus if the first withdrawal is at least 12 months after your first payment. Withdrawing for other reasons before age 60 incurs a 25% charge.

What lenders look at

Lenders consider income, outgoings, credit history, job security, the deposit and the property. They commonly cap borrowing at around 4.5 times annual income, though most people are offered less; see how much can I borrow?. Mortgages explained describes the types of deal you may be offered.

Protecting the commitment

A mortgage is a long commitment that continues if income stops. MoneyHelper suggests considering life insurance, critical illness cover or income protection so that repayments can still be met if something unexpected happens. Income protection and life insurance each explain what that cover does and does not do.

First-time buyer checklist

• Have you set a budget that allows for rate rises and a change in income?
• Is the deposit saved, and is any gift documented?
• Is your credit report accurate?
• Do you have a mortgage in principle and a clear view of the monthly cost?
• Have all upfront costs been added up, not just the deposit?
• Do you know when the initial deal ends and what happens then?