Beginner's guide To: Mortgages for first-time buyers

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The Independent Online

Many would-be homeowners want to take advantage of the depressed housing market to snatch up a bargain. Of course, one reason for low house prices is that it's become difficult to get a mortgage – so it is a tough time to buy your first home.

How much should I save?

Gone are the days when you could buy a home with no deposit: buyers need at least 10 per cent of the property's value if they want to borrow and 25 per cent or more if they want a market-leading deals.

It's also important not to forget other costs such as stamp duty and legal fees.

What's available?

Before the credit crunch there were a number of mortgage deals aimed at first-time buyers. This range of products has been depleted, but that doesn't matter. Theoretically you can choose from any mortgage available for house purchases (some products are restricted to those who are remortgaging).

In practice, though, the options available to you will depend on the size of your deposit and the amount you want to borrow – some mortgages have minimum or maximum loan sizes.

The other key factor that could affect your ability to get a mortgage is your credit history – lenders are looking for low-risk borrowers. The problem some first-time buyers encounter is they often don't have a track record when it comes to managing credit because of their age: they've never had a mortgage and may not have had credit cards.

If you are looking to get on to the property ladder it is important to check your credit score and look at ways of boosting it if necessary – make sure you're on the electoral roll and consider taking out a credit card if you don't already have one. Things like this make a difference.


The best deals are reserved for people with big deposits, so if you can't buy now then keep on saving. If you can't save enough on your own, consider buying with friends or a shared equity deal.

Looking for credit card or current account deals? Search here