Buying your first home is one of the most exciting and significant milestones in life. However, with rising property prices, complex mortgage options, and ever-changing government schemes, the process can feel overwhelming.
Whether you’re just starting to explore homeownership or ready to make an offer, this UK mortgage guide for first-time buyers in 2025 will walk you through everything you need to know:
- Types of mortgages available
- Step-by-step process to apply
- Best banks and lenders for first-time buyers
- Mortgage calculators and deposit-saving tips
- Government schemes designed to help you get on the property ladder
Let’s break it all down so you can buy your first home with confidence.
Types of Mortgages in the UK
Understanding the different types of mortgages is essential before applying. Each comes with its own benefits and risks depending on your financial situation and long-term goals.
1. Fixed-Rate Mortgage
- Interest rate stays the same for a set period (e.g., 2, 5, or 10 years)
- Predictable monthly payments
- Ideal if you want stability and protection from rate rises
2. Variable-Rate Mortgage
- Interest rate can go up or down
- Includes tracker mortgages (linked to the Bank of England base rate) and standard variable rate (SVR) mortgages
- More risk but sometimes cheaper initially
3. Discounted-Rate Mortgage
- A type of variable-rate mortgage offering a discount off the lender’s SVR for a set time
- Lower initial payments but can rise after the discount ends
4. Offset Mortgage
- Links your mortgage to your savings — the more you save, the less interest you pay
- Great for those with significant savings or fluctuating income
5. Help to Buy Equity Loan (England & Wales)
- Government-backed scheme allowing you to borrow up to 20% of the property value (40% in London) interest-free for the first 5 years
- You only need a 5% deposit
6. Shared Ownership
- Buy a share of a property (between 25% and 75%) and pay rent on the remaining portion
- Run by housing associations; ideal for lower-income buyers
7. First Homes Scheme (England)
- New homes sold at a minimum 30% discount to local first-time buyers
- Priority given to key workers and military veterans
Choose a mortgage that fits your lifestyle, income stability, and future plans.
Steps to Apply for a Mortgage
Buying your first home involves several steps. Here’s a step-by-step breakdown:
Step 1: Check Your Credit Score
- Use free tools like Experian, ClearScore, or Credit Karma
- Fix any errors and improve your score where possible
Step 2: Decide How Much You Can Afford
- Use online mortgage affordability calculators
- Consider your income, outgoings, and existing debts
Step 3: Save for a Deposit
- Most lenders require at least a 5–10% deposit
- The larger the deposit, the better the mortgage rates you’ll qualify for
Step 4: Get a Mortgage Agreement in Principle (AIP)
- Also known as a decision in principle (DIP)
- Shows estate agents you’re serious and helps you understand how much you can borrow
Step 5: Find a Property Within Your Budget
- Search online platforms like Rightmove, Zoopla, or OnTheMarket
- Visit properties and do your due diligence
Step 6: Apply for a Mortgage
- Work directly with a bank or use a mortgage broker
- Submit documents like payslips, bank statements, and ID
Step 7: Underwriting and Valuation
- Lender assesses your application and conducts a valuation of the property
Step 8: Mortgage Offer Issued
- Once approved, you’ll receive a formal mortgage offer
Step 9: Exchange Contracts and Completion
- Sign contracts, pay deposit, and agree on moving date
- Funds are transferred, keys handed over
Best Banks & Lenders for First-Time Buyers
Several UK lenders offer competitive rates and excellent service for first-time buyers. Here are some top choices:
| Lender | Features | Minimum Deposit |
|---|---|---|
| Barclays | First-time buyer incentives, flexible repayment options | 5% |
| HSBC | Free mortgage advice, digital support tools | 5% |
| Nationwide Building Society | Strong track record with first-time buyers | 5% |
| Lloyds Bank | Competitive rates and helpful resources | 5% |
| Santander | Cashback offers and dedicated first-time buyer support | 5% |
| Virgin Money | Simple process and good customer service | 5% |
| Halifax | Easy-to-use online tools and guidance hub | 5% |
Some lenders also offer first-time buyer cashback deals, helping reduce upfront costs.
Mortgage Calculators & Deposit Tips
Using the right tools can help you plan your budget effectively.
Online Mortgage Calculators:
- MoneySavingExpert Mortgage Calculator
- Which? Mortgage Calculator
- Halifax Mortgage Calculator
- Nationwide Mortgage Affordability Tool
These tools help estimate:
- Monthly repayments
- Total interest paid over time
- Stamp duty costs
- Required deposit amount
Tips to Save for a Deposit:
- Open a Lifetime ISA (LISA) – Get a 25% government bonus (up to £1,000/year)
- Set up automatic transfers to a high-interest savings account
- Avoid unnecessary spending and create a savings goal
- Ask family for help (some lenders allow gifted deposits)
- Consider renting with friends to save faster
Government Schemes Available in 2025
The UK government offers several initiatives to help first-time buyers enter the property market:
1. Help to Buy Equity Loan (England & Wales)
- Available until 2026
- Borrow up to 20% of property price (40% in London)
- Pay no interest for first 5 years
- Must be buying a new build home under £600,000
2. First Homes Scheme (England)
- Homes sold at 30%+ discount to eligible first-time buyers
- Priority for local residents and key workers
- No cap on property value, but must be below market rate
3. Shared Ownership (England & Wales)
- Part-buy, part-rent model managed by housing associations
- Minimum 25% equity required
- Option to staircase (buy more shares over time)
4. Help to Buy Scotland
- Similar to Help to Buy but with regional variations
- Offers equity loans for new-build homes
5. Help to Buy Northern Ireland
- Same concept as mainland UK, tailored to NI housing market
Final Thoughts
Buying your first home is a big financial commitment — but with the right planning, knowledge, and support, it’s absolutely achievable.
From choosing the best mortgage type and saving for a deposit to leveraging government schemes and working with experienced lenders, there are many ways to make homeownership a reality.
Take your time, do your research, and don’t hesitate to seek professional advice from a mortgage broker or financial advisor.
If you’re ready to take the next step, start by checking your credit score, setting a realistic budget, and exploring your options today.