Top 10 Flexible Mortgages - Compare the Best Rates

Top 10 First Time Buyer Mortgages – Compare Best Rates

You can use this comparison to find a first time buyer mortgage. If you’re buying a house for the first time, this first time buyer guide may help answer any questions you might have.

What mortgages can a first time buyer get?

If you’re a first time home buyer, there are lots of great deals around to help you onto the housing ladder.

You can use our comparison tools to find a first time mortgage that offers the best rates and terms for your needs.

Before you start, you’ll need to save up for a first time buyer deposit. How much you save up will impact what sort of mortgage is suitable for you for your first home.

What type of first time buyer mortgage should I choose?

If you’re buying a house for the first time (or a flat), you could either get a fixed rate mortgage or a variable mortgage. The decision depends on how much financial security you need. First time buyer mortgage rates are affected by which type of mortgage you choose.

Learn more about getting your first mortgage.

With a fixed rate mortgage, the interest rate is guaranteed to stay the same over a set period of time. But the payments might be slightly higher than they would with the best variable mortgage. A first time home buyer might find the security of fixed payments reassuring.

With a variable mortgage, the interest rate can change. The monthly repayments are usually a bit cheaper with a fixed rate mortgage. But if the interest rate changes – often because the Bank of England base rate changes – your repayments can become higher. Some first home buyers are willing to take the risk for the sake of lower repayments initially.

The mortgages first time buyers choose varies. The best mortgages for first time buyers is something that depends on your situation and how much financial security you need.

Learn more about fixed and variable rate mortgages.

How does a variable rate mortgage work?

A variable rate mortgage is where the interest you pay on your home loan can go up or down depending on the Bank of England’s base rate.

If the Bank of England raises interest rates, your lender can increase your mortgage interest rate. That means the monthly cost of your home loan increases.
It can work the other way, too. If interest rates fall, your mortgage costs may also decrease.

You might feel that this is the best first time buyer mortgage if you believe interest rates will stay low for your mortgage term.

How does a fixed rate mortgage work?

A fixed rate mortgage is where the interest you pay on your home loan stays the same over a set period of time. You can fix it at the same rate for several years.

This can be the best first time buyer mortgage if you want to know how much you’ll be paying each month for a number of years. As this can help with budgeting, a fixed rate mortgage is often seen as the best option for a first time buyer.

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How long should I fix my mortgage for if I’m a first time buyer?

You usually have several options for how long you can fix your mortgage for. These are:

  • two years

  • three years

  • five years

  • 10 years.

When it comes to mortgages for first time buyers, the different term lengths all have pros and cons. For example, two and three year fixed rate mortgages are often competitively priced and have lower interest rates. Ten year fixes tend to be more expensive when you first take them out, but could give you more financial security later on.

Whatever term you choose, at the end of your fixed rate mortgage term your loan will revert to the lender’s standard variable rate (SVR). This is usually a lot more expensive, so you’ll need to remortgage as soon as possible.

Should a first time buyer get a long term or short term fixed mortgage?

How much can I borrow as a first time home buyer?

When you apply for a first mortgage, the lender will want to have a look in detail at your finances. They’ll need to know how much you earn, your monthly outgoings and living costs. They’ll also check how much of your income you spend each month.

The lender will work out how much you can borrow based on your income. Usually, the total mortgage you’ll be offered will be a maximum of five times your income. But it could be lower than this. Each mortgage offer is made on an individual basis.

Calculate how much you can borrow with our first time buyer mortgage calculator.

How to find the best mortgages for first time buyers

In general, the best first time buyer mortgages are the ones with the lowest interest rates and no fees.

When you’re buying your first home, there are a few decisions to make before you look for the best first time buyer mortgages and apply for one. These include:

  • How much you need to borrow

  • Whether you want a fixed or variable rate mortgage

  • How long you’ll need to pay off the entire balance (the mortgage’s term).

To find the best first time buyers mortgage, use our comparison table above.

The comparison shows you the interest rate you’ll pay and any costs such as arrangement fees.

It also shows you the maximum loan-to-value available on that mortgage. Some of the best deals are only available to people who have saved up 25% of the value of the home they want to buy. In the tables, this shows up as a maximum LTV of 75%. So if you want to find the very best mortgage for first time buyers it’s a good idea to save up a larger deposit.

Read about:   Is It Better to Rent or Buy?

Watch out for any mortgage for first time buyers that has low monthly repayments but high fees. If it’s a short term fixed mortgage, this can quickly add up as you’ll need to remortgage every couple of years.

First time buyer deposit

One of the hardest bits of getting your first mortgage is saving up a deposit, especially if you want to buy a house in an expensive part of the country.

Here are some common questions and tips for saving up a deposit for your first mortgage. This advice could help you get the best mortgage rates for first time buyers.

How much deposit do I need as a first time buyer?

You usually need a deposit of at least 5% to get a mortgage.

For example, if a mortgage has an LTV of 95%, you’ll need a 5% deposit. On a £150,000 property, this would mean a deposit of £7,500. You’d get a mortgage for the remaining £142,500.

You can find 95% mortgages for first home buyers from a wide range of lenders in our comparison tables.

Do I need a big deposit for a first time mortgage?

If you want to get the best mortgage deals for first time buyers, you’ll need to save up a good-sized deposit. The size of deposit you have saved up will have a big influence on the first time buyer mortgage you’re offered.

The bigger your first time buyer mortgage deposit, the better the deal you’ll get. That’s because the more money you can put in, the less risky it is for the lender, so they’ll offer you their best mortgage deals for first time buyers.

The amount you need to borrow, relative to the value of the property you want to buy, is known as the loan to value ratio (LTV). Lenders express this as a percentage. So if you have an LTV of 95%, it means you only have a 5% first time home buyer deposit to put down.

How to save up a deposit

If you’re buying your first home, some of the best first time buyer mortgage advice you can get is to save up the biggest deposit you can. It’ll increase your chances of getting accepted for a mortgage and could help you better first time buyer mortgage rates.

A decent-sized first time home buyer deposit increases the number of mortgages available to you. For example, a 10% deposit means you can get mortgages with an LTV of 90% or more, but a 15% deposit lets you get 85% LTV deals as well.

The best way to save a first time buyer mortgage deposit is to look at your monthly outgoings and see where you can spend less.

By reducing your spending, you’ll be able to save more. When the lender looks at your finances and bank statements, they’ll see that you’re careful with your spending. They’ll look on you favourably for your first time home buyer loan offer.

Read about:   Scotiabank Mortgage Rates

How to save up a mortgage deposit.

Can I get a mortgage with no deposit?

If you’re looking for a first time buyer mortgage, no deposit isn’t the ideal situation. But if you haven’t saved a deposit, you might still be able to buy a house.

Use our comparison tables to find lenders that accept buyers looking for a 100% mortgage.

Most mortgages need at least a 5% deposit for first time loans. But some are available alongside first time home buyer government schemes to help you get on the property ladder.

How to get a mortgage with no deposit.

Help to Buy

Help to Buy is a first time home buyer government scheme that can help you get a mortgage with a small deposit.

They offer equity loans. That’s when they lend you money that you can use towards your deposit, and you repay it later.

  • Learn more about the Help to Buy first time home buyer government scheme.

  • Compare Help to Buy mortgages to find the right deal for you.

Shared ownership
There is another first time home buyer government scheme which offers shared ownership.

That’s when you buy a share of your home’s value, between 25% and 75% and pay rent on the portion you don’t own. This means you can buy a house with a smaller mortgage, and therefore a smaller deposit too.

Lifetime ISA
If you’re over 18 but under 40, you can make the most of the Lifetime ISA. This is a first time home buyer government incentive to help you buy your first home and save for your future.

Under the rules you can add £4,000 a year into your Lifetime ISA until you’re 50. The government adds a 25% bonus to the money you save, up to a maximum of £1,000 annually.

First time buyer mortgage FAQs


Can I get an interest only mortgage?


It is very unlikely that you will be offered an interest only mortgage as a first time buyer. Most interest only mortgages are reserved for landlords with multiple properties.


Do I need to save a deposit?


Does my credit record matter?


Can I get a mortgage with someone else?


Yes, and getting a joint mortgage means you could borrow more and make the repayments easier to afford. Here is how joint mortgages work.


Are 95% mortgages available to first time buyers?


Yes, some lenders offer mortgages to first time buyers with a 5% deposit. You can find these deals in this comparison.

About our mortgage comparison


Who do we include in this comparison?


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.

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