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Speak to our UK team 03300 949 409
First Time Buyer Mortgage |
View our user-friendly fact sheets to help you make your own decisions about your mortgage today
My Mortgage & Protection Experts understand that as a first time buyer you may find buying your first home quite daunting. Our quick and easy to use mortgage eligibility checker will assist you to gain an instant indication as to whether we believe we can get you a mortgage (this is subject to credit score and financial assessment).
Book an Adviser’s TimeClick on “can I get a mortgage”, which will lead you through to our mortgage search, here you can review potential products available. Click select on a product which will take you through to the mortgage eligibility checker for you to gain your instant decision.
Raising a sufficiently large deposit can be one of the hardest personal money challenges. Research in 2013 by Moneysupermarket.com indicates that the average age of a first time buyer in the UK has risen to 35. Many require the assistance of parents or other relatives in order to be able to purchase even at this age, making this a key family finance issue. In an effort to make it easier for young people to get on the ladder, the Government introduced its Help to Buy scheme in April 2013. The first stage applied to new-build properties only.
The Government’s Help to Buy scheme aims to provide help with mortgages to prospective borrowers for new build homes, and the area of first time buyer mortgages, providing they are valued at under £600,000. This first part of the scheme allows a prospective buyer with a deposit of only 5% of the property value to obtain a mortgage. Instead of the 95% mortgage, such a customer would have to try and find previously, they can now apply for a mortgage for 75% of the value, for which they are much more likely to be accepted, while the remaining 20% is provided in the shape of a loan from the Government.
No interest will be charged on the equity loan portion for the first five years. The loan will need to be repaid alongside the mortgage at the end of the term.
This scheme is available in England only. The Scottish Government, Welsh Government and Northern Ireland Housing Executive run similar schemes – check out their websites.
The amount a lender will lend you depends on your income & credit commitments. Historically lenders would use a simple multiple of your income however nowadays the majority use complex affordability models to determine the size of the loan. These models usually consider the following: your income and how guarenteed it is, how many children you have, your outgoings, such as loans and credit cards, your credit score and how many years you want to borrow the money for.
As a rough guide a typical multiple is four times your income, however if you want to borrow £100,000 with a £25,000 income but have 4 children you are less likely to be approved.
You usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price when you buy residential property, for example a house or flat. SDLT only applies to properties over a certain value.
The amount you will pay depends on the following;
When You bought the property
How much you paid for the property?
You can also use this table to work out the SDLT for the purchase price of a lease (the ‘lease premium’).
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £500,000 | Zero |
| The next £425,000 (the portion from £500,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Example
In March 2021 you buy a house for £625,000. The SDLT you owe will be calculated as follows:
| 0% on the first £500,000 | £0 |
| 5% on the remaining £125,000 | £6,250 |
| Total SDLT | £6,250 |
You can also use this table to work out the SDLT for the purchase price of a lease (the ‘lease premium’).
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £250,000 | Zero |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Example In August 2021 you buy a house for £275,000. The SDLT you owe will be calculated as follows:
| 0% on the first £250,000 | £0 |
| 5% on the remaining £25,000 | £1,250 |
| Total SDLT | £1,250 |
Use the SDLT calculator to work out how much tax you’ll pay.
These rates also apply if you bought a property before 8 July 2020.
You can also use this table to work out the SDLT for the purchase price of a lease (the ‘lease premium’).
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £125,000 | Zero |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Example In October 2021 you buy a house for £295,000. The SDLT you owe will be calculated as follows:
| 0% on the first £250,000 | £0 |
| 2% on the next £125,000 | £2,500 |
| 5% on the final £45,000 | £2,250 |
| Total SDLT | £4,750 |
You can claim a discount (relief) if you buy your first home before 8 July 2020 or from 1 July 2021. This means you’ll pay:
No SDLT upto £300,000
5% SDLT on the portion from £300,001 to £500,000
You’re eligible if you and anyone else you’re buying with are first-time buyers.
If the price is over £500,000, you follow the rules for people who’ve bought a home before.
Use the SDLT calculator to work out how much tax you’ll pay.
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