A first-time buyer can vary in definition depending on which lender you go with, but the majority will classify you as one as long as you have never owned a property in the UK.
What are the benefits of being a first-time buyer?
First-time buyers can have a range of different benefits when it comes to getting a mortgage, depending on which lender they choose and what their credit history is like.
Some benefits include lower deposits (sometimes 0%), larger cashbacks, higher loan-to-income ratios, free valuations, and free legal advice.
Main Benefits of Being a First-Time Buyer:
- Lower Deposit Requirements – First-time buyers can often access mortgages with smaller deposits, as low as 5% or even 0% in specific cases, like Skipton’s 100% mortgage. This makes getting onto the property ladder more achievable without needing years of savings.
ㅤ - Stamp Duty Exemptions – First-time buyers don’t pay Stamp Duty Land Tax on homes up to £300,000, offering a significant saving compared to home movers. On homes between £300,000 and £500,000, only the amount over £300,000 is taxed at 5%.
ㅤ - Exclusive Mortgage Deals – Many lenders offer special mortgage products just for first-time buyers, including lower rates, cashback offers, free valuations, and contribution toward legal fees, all designed to make the process more affordable.
ㅤ - Government Schemes – First-time buyers have access to supportive government schemes such as:
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Lifetime ISA (LISA): Save up to £4,000/year and get a 25% bonus from the government to use toward a deposit.
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Shared Ownership: Buy a share of a home (25%–75%) and pay rent on the rest.
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First Homes Scheme: Buy a new-build at a discount of 30–50% if you’re a key worker or local resident.
How would my credit score affect it?
If you’re applying for a mortgage and want to take advantage of benefits such as a 0% deposit, only Skipton Building Society currently offers this.
However, if you fall outside their credit rating criteria, you may not be eligible for this product.
With other lenders, they offer product ranges where different products apply to different types of applicants.
If you fall into a ‘credit repair’ category, meaning you have items on your credit report that the lender doesn’t approve of, you may lose access to some benefits compared to those in the mainstream category.
Do you pay stamp duty as a first-time buyer?
For Stamp Duty Land Tax, a first-time buyer has a threshold of £300,000, meaning they can purchase their first home up to that value without having to pay any stamp duty.
Anything over £300,000 will incur a 5% charge. For example, if the purchase price is £310,000, you would pay £500 in Stamp Duty Land Tax (5% of the £10,000 over the threshold).
Some lenders are offering cashbacks to first-time buyers to cover a portion of the stamp duty paid.
What is the average deposit for a first-time buyer?
Deposit size can vary depending on your financial circumstances, there’s no one-size-fits-all. However, there are minimum requirements.
Most lenders require a minimum deposit of 5%, so for a £200,000 purchase, you’d need a £10,000 deposit. As mentioned, Skipton offers 100% mortgages, meaning no deposit is needed.
Accord Mortgages also offers an option where first-time buyers can put down just £5,000, and they will lend up to 99% of the property’s value, provided the buyer has that £5,000 deposit.
If you have a not so great credit history, some lenders may required a 15% -25% deposit a they may deem it as more of a risk.
What age do I have to be? Am I too old?
Most lenders require you to be either 18 or 21 years old to apply, but there’s no maximum age to be a first-time buyer.
As long as you’re below the lender’s maximum age limit for a mortgage and have never owned a property, you should be fine.
How do I get a first-time buyer mortgage?
Most lenders offer first-time buyer mortgages, but everyone’s circumstances are different. To get the best mortgage tailored to you and your needs, it’s best to speak with a mortgage adviser who can guide you in the right direction.
Frequently Asked Questions
What is a first-time buyer?
A first-time buyer can vary in definition depending on which lender you go with, but the majority will classify you as one as long as you have never owned a property in the UK.
What age do I have to be? Am I too old?
Most lenders require you to be either 18 or 21 years old to apply, but there’s no maximum age to be a first-time buyer.
How do I get a first-time buyer mortgage?
Most lenders offer first-time buyer mortgages, but everyone’s circumstances are different. To get the best mortgage tailored to you and your needs, it’s best to speak with a mortgage adviser who can guide you in the right direction
What is the stamp duty exemption for first-time buyers?
First-time buyers in the UK pay no stamp duty on properties up to £300,000. For homes costing more, they pay 5% on the portion above £300,000.
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