First time buyer mortgages: how much you can borrow

What first time buyer mortgages are

First time buyer mortgages are ordinary residential mortgages offered to people who have never owned a home, often with a small deposit. How much you can borrow depends on your income, your outgoings and your deposit. MoneyHelper says the most you can borrow is usually capped at four and a half times your annual income, and that most mortgages ask for a deposit of at least 5% to 10% of the price.

There is no separate legal category of mortgage for first-time buyers. Lenders label some of their range as first time buyer mortgages, commonly because it accepts small deposits or comes with extras such as cashback or help with fees. You are free to apply for any residential mortgage you qualify for.

This guide covers the mortgage itself. For the whole purchase, from choosing a plot to getting the keys, read the first-time buyers' guide to new builds.

How much can a first time buyer borrow

Lenders look at two things together: a multiple of your income, and a detailed check of what you can pay each month.

Income multiples

Your loan-to-income ratio is the amount you borrow divided by your annual income before tax, including the income of anyone you are buying with. MoneyHelper says borrowing is usually capped at four and a half times income and that most people are offered less than the cap. It also says some lenders have mortgages available at 5 or 6 times household income.

These are sums, not offers. What you are offered can be lower or higher, depending on the lender and on you.

The rule behind the 4.5 figure

The figure comes from a limit set by the Bank of England's Financial Policy Committee on lending at high income multiples. Regulators count a mortgage as high loan-to-income when it is 4.5 times the borrower's income or more, and the Committee's limit for that lending is 15% of new residential mortgages. The limit applies to lenders, not to borrowers: it has never banned any one person from borrowing more than 4.5 times their income.

Until October 2026, the 15% limit was applied to each lender above a minimum size separately. On 28 October 2026, changes by the Prudential Regulation Authority and the FCA took effect that remove the firm-specific 15% cap. As of November 2026, the regulators instead aim to keep this kind of lending to 15% of new mortgages across the market as a whole. An individual lender can go above 15% in line with its own appetite for risk, and the regulators say they may expect lenders to move back towards 15% if the market as a whole drifts above the limit. The 4.5 threshold itself did not change.

That does not mean every first-time buyer can now borrow more. FCA rules still require every lender to check that you will be able to make the payments.

What lenders check

Under the FCA's rules, a lender has to take full account of your income after tax, your committed spending and your household's basic living costs, and of the effect of likely future interest rate rises. In practice the affordability check looks at:

• Your income: salary and, depending on the lender, regular overtime or bonus, self-employed profit and some benefits.
• Your committed spending: loans, credit cards, car finance, childcare, maintenance.
• Your living costs: bills, travel, food.
• Your credit record.
• Whether you could still pay if interest rates rose.

MoneyHelper notes that paying off existing debts frees up more of your income for the mortgage each month, which can change what a lender offers. The how much you could borrow calculator gives an illustration from your own figures, and the mortgage affordability guide explains the checks in detail.

How much deposit do first-time buyers need

MoneyHelper says most mortgages ask for a deposit of at least 5% to 10% of the price of the home. The rest is the mortgage, and the mortgage as a share of the price is the loan-to-value (LTV).

Lenders commonly price first time buyer mortgages, like all others, in LTV bands, and the rate on offer usually falls as the deposit grows. The loan-to-value guide explains the bands, and the first-time buyer rates page shows what lenders publish at each deposit level today.

The deposit is not the only cash you need. Legal fees, a valuation, any mortgage fees, moving costs and, above the relief threshold, stamp duty are all extra. The cash you need calculator adds them up for a specific home.

95% mortgages and the Mortgage Guarantee Scheme

Many first time buyer mortgages are 95% mortgages, which let you buy with a 5% deposit. Lenders treat these loans as higher risk, because a small fall in house prices could leave the loan bigger than the home's value.

The government's Mortgage Guarantee Scheme exists to keep 95% mortgages available. The Treasury launched a new, permanent version of the scheme in July 2025. As of November 2026, GOV.UK and the scheme rules say:

• The guarantee goes to the participating lender, not to you. It covers part of the lender's potential losses on the loan.
• It covers mortgages of more than 90% and up to 95% of the home's value.
• It is for eligible first-time buyers and home movers across the UK.
• The mortgage must be a repayment mortgage, not interest-only, and not a buy-to-let.
• At least one borrower must intend to live in the home.
• Purchases through a shared ownership or shared equity scheme are outside it, and so are offset mortgages and mortgages backed by a substantial guarantee or deposit from someone else.
• The lender must still assess that you can meet the payments, including a test against future interest rate rises.

You do not apply to the scheme. You apply for a 95% mortgage, and the lender decides whether to use the guarantee. Not every lender takes part, and each lender has its own criteria.

Are there 100% mortgages for first-time buyers

Some exist, but MoneyHelper says there are usually not many to choose from, and that there are risks attached. It explains that some ask for a guarantor, who is responsible for the payments if you miss them and whose credit file and finances the lender will check. Lenders that do not ask for a guarantor set other conditions, such as a history of paying rent and bills on time, or a family deposit, where a relative keeps a percentage of the property's price in a savings account as a guarantee.

Borrowing the whole price means you have no cushion. If the home's value falls, you could owe more than the home would sell for, which commonly makes it harder to move or remortgage. MoneyHelper adds that you are likely to pay a higher interest rate. The guarantor mortgage guide covers the ways family can help, including gifted deposits.

Saving with a Lifetime ISA

A Lifetime ISA is a savings account with a government bonus, for a first home or for later life. As of November 2026, GOV.UK says:

• You must be 18 or over and under 40 to open one.
• You can pay in up to £4,000 each tax year until you are 50.
• The government adds a 25% bonus, up to £1,000 a year.
• You can use it for a first home costing £450,000 or less with no withdrawal charge, if you buy with a mortgage at least 12 months after your first payment in.
• Your conveyancer or solicitor receives the money directly from the ISA provider.
• If you are buying with another first-time buyer who has a Lifetime ISA, you can each use yours.

HMRC says that, as announced at the October 2026 Budget, the charge for using a Lifetime ISA on a first home costing more than £450,000 is 20%, not the usual 25%, for withdrawals made on or after 29 October 2026. The £450,000 limit itself is unchanged, and taking money out for most other reasons before age 60 still costs 25%.

HMRC has also said the government will introduce a new First Time Buyer ISA from April 2029, which will be offered in place of the Lifetime ISA. It says transfers from a Lifetime ISA into the new account will not be permitted, but both can be used towards the same purchase.

Stamp duty relief and other schemes

In England and Northern Ireland, first-time buyers pay no stamp duty on the first £300,000 of a home costing up to £500,000. GOV.UK says you are eligible only if you and anyone you are buying with are first-time buyers. Above £500,000, the relief is lost and the standard rates apply. Scotland and Wales have their own taxes and rules. The stamp duty calculator works out the figure for your price and nation.

Other help includes shared ownership, First Homes and Your First Home, a new government equity loan scheme for first-time buyers of new-build homes in England. GOV.UK says Your First Home buyers will need a deposit of at least 2.5% of the price and a repayment mortgage from a participating lender, with a government equity loan worth 20% of the price that is interest free for 5 years. There will be local price caps and a household income limit of £110,000 outside London and £140,000 in London. As of November 2026, GOV.UK says the scheme is expected to open for applications in February 2027, with full eligibility rules to be published before then. The schemes page sets out each scheme and who qualifies, and the Your First Home calculator shows how that scheme changes the sums.

What type of mortgage should a first-time buyer get

There is no single answer, because it depends on how much certainty you want and what you can pay. The main choices are:

• Fixed rate. Your rate and payment stay the same for a set period, commonly two or five years. Compare the 2-year fixed and 5-year fixed pages.
• Tracker. Your rate moves up and down with the Bank of England's Bank Rate.
• Term. A longer term lowers the monthly payment but means you pay more interest in total.
• Fees. Some mortgages have a product fee and a lower rate, others no fee and a higher rate.

The types of mortgage guide explains each, and the mortgage calculator shows the payment at any rate and term. A qualified, regulated mortgage adviser can recommend a type of mortgage for your circumstances; the mortgage broker guide explains how advisers work and what they charge.

First time buyer mortgages on a new build

Buying new adds a few checks:

• Lender criteria. Lenders set their own rules for new homes, and some ask for a bigger deposit on a new-build flat than on a house. It helps to know that the lender accepts the specific plot before you reserve.
• Incentives. A builder's deposit contribution or other incentive is declared to your lender, which may take it off the price when it works out the LTV.
• Timing. If the home is not finished, your mortgage offer needs to last until completion, or be extended.
• The deposit date. You usually pay your deposit at exchange of contracts, which can be within weeks of reserving.

The new-build mortgages guide covers each of these, and the new-build rates page shows lenders' published rates for new homes.

Steps to your first mortgage

1. Check your credit record and correct any mistakes. The guide to the credit score for a mortgage explains how.
2. Work out a budget with the how much you could borrow calculator.
3. Gather your documents: ID, payslips or accounts, bank statements and proof of deposit.
4. Get a mortgage in principle, which sellers and builders commonly ask to see.
5. Find a home and have your offer accepted, or reserve a plot.
6. Make the full application. The lender values the home and checks your documents.
7. Receive your mortgage offer, and check its expiry date against your completion date.
8. Exchange contracts, pay the deposit, then complete.

The how to get a mortgage guide takes you through the application in detail.