What makes a mortgage good for a first-time buyer?
First-time buyers usually face two constraints: a smaller deposit and a shorter credit history. The best first-time buyer mortgages are the ones that work around those — accepting lower deposits, taking a sensible view of affordability, and not penalising you for limited borrowing history. When comparing, weigh up the maximum loan-to-value (LTV) a lender offers, how they assess income, the rate and fees, and whether early repayment charges lock you in.
1. 95% LTV (5% deposit) mortgages
The workhorse first-time buyer product — you put down 5% and borrow 95%. They make buying possible far sooner than saving 10–20% would, but the trade-off is a higher rate and stricter affordability checks. Best for buyers with stable income and a clean credit file who want to get on the ladder quickly.
Pros: low deposit, widely available. Cons: higher rates, less equity buffer if prices dip.
2. Guarantor and joint borrower sole proprietor (JBSP) mortgages
If your income alone won't stretch, family can help. A guarantor mortgage uses a relative's savings or property as security. A JBSP mortgage adds a parent's income to affordability while keeping you the sole owner — useful for stamp duty and keeping parents off the deeds. Best for buyers with willing, financially stable family support.
Pros: boosts borrowing. Cons: ties family to your mortgage; not every lender offers JBSP.
3. Shared ownership mortgages
You buy a share (typically 25–75%) and pay rent on the rest, with a mortgage covering only your share — dramatically lowering the deposit and income needed. Best for buyers priced out of full ownership, especially in London and the South East.
Pros: much lower entry cost. Cons: rent on top, service charges, resale restrictions; fewer lenders, so a specialist helps.
4. Mortgages that use first-time buyer schemes
Schemes change over time, but first-time buyers can often use stamp duty relief, Lifetime ISA bonuses toward a deposit, and regional schemes. The best mortgage here is one from a lender that works smoothly alongside whichever scheme you use.
5. Longer-term mortgages (30–40 years)
Stretching the term lowers monthly payments and can improve affordability, helping you pass the stress test — but you pay more interest overall. Best as a stepping stone: many buyers overpay or remortgage to a shorter term once income grows.
What lenders look at for first-time buyers
- Deposit size — bigger deposit, lower rate band
- Income and job stability — usually 3+ months in role; income multiplied by ~4–4.5×
- Credit history — electoral roll, no missed payments, low card balances
- Outgoings — existing loans, car finance and childcare reduce borrowing
How to find the best first-time buyer mortgage for you
Because the best option depends on your deposit and income, a whole-of-market broker is the fastest way to see which lenders will actually accept you and at what rate — including smaller building societies with the most flexible first-time buyer criteria that don't appear on comparison sites. Find a first-time buyer mortgage broker through Nesto — free, no obligation.
Frequently asked questions
What's the smallest deposit a first-time buyer needs?
Most lenders require at least 5% of the property price. A few guarantor or specialist products allow less, but 5% is the practical minimum for mainstream 95% LTV mortgages.
How much can a first-time buyer borrow?
Typically 4 to 4.5 times annual income, though some lenders go higher for certain professions or higher earners. Affordability is also stress-tested against your outgoings.
Is a longer mortgage term a good idea for first-time buyers?
It lowers monthly payments and can help you qualify, but you pay more interest overall. Many buyers start long and shorten later by overpaying or remortgaging.
Do first-time buyers get better mortgage rates?
Not inherently — rates are driven by deposit and credit profile, not first-time buyer status. But first-time buyers do benefit from stamp duty relief and some scheme-linked products.
Should I use a broker as a first-time buyer?
Strongly recommended. A whole-of-market broker knows which lenders accept low deposits, limited credit history or scheme purchases, and can save you from applications that would be declined.