First-Time Buyer Mortgages: Your Complete 2024 Guide

Buying your first home is exciting but navigating the mortgage process can feel overwhelming. This comprehensive guide covers everything you need to know as a first-time buyer in 2024.

What Is a First-Time Buyer?

Official Definition: Someone who has never owned a property anywhere in the world.

Key Points:

Owned property abroad? Not a first-time buyer
Inherited property share? Not a first-time buyer
Previously owned, now renting? Not a first-time buyer
Buying with partner who owned before? Only you are first-time buyer

Why It Matters:

Access to government schemes (Help to Buy ISA, Lifetime ISA)
Stamp duty relief (save up to £6,250)
Better mortgage rates with some lenders
Specialist first-time buyer products

How Much Can You Borrow?

Income Multiples (2024):

Lender Type	Income Multiple	Example
High street banks	4.5x	£40k income = £180k max
Building societies	4.0-4.5x	£40k income = £160-180k
Specialist lenders	Up to 5.5x	£40k income = £220k max

Factors Affecting Affordability:

Income:

Basic salary (100% counted)
Guaranteed overtime (usually 50-100%)
Bonus (usually 50%)
Commission (average of 2 years)
Benefits (varies by lender)

Outgoings:

Credit commitments (loans, credit cards, car finance)
Childcare costs
Student loans
Other regular commitments

Affordability Stress Test:

Lenders test you can afford payments if rates rise:

Example:

Mortgage needed: £200,000
Current rate: 4.5%
Test rate: 7.5% (stress test)
Monthly payment at test rate: £1,478

You must prove affordability at 7.5%, even though you'll pay less initially.

Minimum Deposit Requirements 2024

Standard Requirements:

Deposit %	Loan-to-Value	Availability	Typical Rate
5%	95% LTV	Limited lenders	5.5-6.5%
10%	90% LTV	Most lenders	4.8-5.8%
15%	85% LTV	All lenders	4.5-5.3%
20%	80% LTV	Best rates	4.2-4.9%
25%+	75% LTV	Lowest rates	3.9-4.5%

95% LTV Mortgages (5% Deposit):

Available Through:

Government guarantee scheme
Nationwide
Barclays
NatWest
Lloyds
HSBC

Restrictions:

Property value usually capped at £600,000
First-time buyers and home movers
Must be residential (not buy-to-let)
Subject to affordability

Pros:

✓ Get on ladder with £12,500 deposit (on £250k property)
✓ Start building equity sooner
✓ Avoid years of additional saving

Cons:

✗ Higher interest rates (5.5-6.5%)
✗ Higher monthly payments
✗ Negative equity risk if property falls
✗ Limited lender choice

How to Build Your Deposit:

Strategy 1: Lifetime ISA (LISA)

Save up to £4,000/year
Government adds 25% bonus (£1,000 max/year)
Can use for first home or retirement (age 60+)
Property must cost £450,000 or less
Must be first-time buyer

Example:

You save: £4,000/year for 3 years = £12,000
Government bonus: £1,000/year for 3 years = £3,000
Total deposit: £15,000

Next Steps: Getting Your First Mortgage

Ready to take the next step? We specialise in first-time buyers and can help you navigate every stage.

Our First-Time Buyer Service:

Initial Consultation (Free):

Affordability assessment
Deposit advice and strategies
Government scheme eligibility
Timeline planning

Mortgage Search:

Access to 90+ lenders
Compare 1000s of deals
Find best rates for your situation
Exclusive first-time buyer products

Get your free first-time buyer consultation - we'll create your personalised plan to homeownership.

First-Time Buyer Mortgages: Your Complete 2024 Guide