What Are the Best Mortgages for First-Time Buyers? A 2025 Guide to Smarter Home Buying
- Yomo Finance
- Oct 13
- 6 min read
What are the best mortgages for first-time buyers in the UK?
Buying your first place is a big deal—and it can feel like alphabet soup. This guide cuts the noise. We’ll show the mortgage types that usually work best, how to compare the real cost, what deposit you need, and a Medway case study with plain-English numbers. When you’re ready, speak to Yomo Finance in Medway for tailored advice.
Table of contents
What counts as a first-time buyer in 2025?
Short answer: you’ve never owned a home before. Not here, not abroad, not jointly. That status matters. It can unlock stamp duty relief and certain schemes. If you’ve owned a place before, even years ago, you usually don’t count as FTB.
How do first-time buyer mortgages work?
You borrow money to buy the property and pay it back monthly over 25–35 years. The big choice is how your interest rate behaves:
Fixed-rate: set for 2, 3, 5 or 10 years. Easy to budget.
Tracker/variable/discount: moves with a benchmark. Can get cheaper if rates fall; can bite if they rise.
Offset: link savings to your mortgage to cut interest.
Family/guarantor-style: a relative supports the application.
Low/no-deposit specials: 95% (sometimes 98–100%) with tighter rules.
Most first-time buyers go fixed. You know your payment. You sleep better.
How do I pick the best deal? (step-by-step)
Get a Mortgage in Principle (MIP). It’s a soft check, a quick sanity test and it helps with viewings.
Decide your deposit/LTV. 5% is fine; 10% usually gets better pricing.
Compare the total cost for the fixed period. That means rate plus any product fee, valuation, legal cashback, and the revert rate after your fix.
Stress-test it. Could you still cope if your rate jumped by 2% after the fix?
Check flexibility. Overpayments, porting, payment holidays—handy if life happens.
Document ready. Payslips, bank statements, ID, SA302s if self-employed.
Apply, value, underwrite, offer. Then your solicitor takes it to completion.
How much deposit do I need -5%, 10% or more?
5% deposit (95% LTV) opens the door for many buyers.
10%+ deposit (90% LTV or lower) usually knocks the rate down a tier and can save thousands over a fix.
Bigger buffer = less chance of negative equity if the market wobbles.
If you can stretch from 5% to 10% without draining your emergency fund, it’s often worth it.
How much can I borrow - 4.5x vs 5.5x–6x income?
Typical lending caps sit around 4.5× income. Some lenders go higher for specific profiles—up to 5.5×–6×—often on longer fixes and with tighter criteria. If you’re self-employed or on a contract, expect a closer look at your numbers (and more paperwork). A broker will tell you who’s realistic and who isn’t—before you waste time.
What will it actually cost me? (rates, fees, stamp duty 2025)
Here’s a purely illustrative snapshot to explain the maths. Your quote will be different.
Example property: £300,000Term: 25 years
Scenario | Deposit | Loan | Example deal | Product fee | Est. monthly* |
A | 10% (£30k) | £270,000 | 5-yr fix ~5.19% (fee-free) | £0 | ~£1,600 |
B | 10% (£30k) | £270,000 | 5-yr fix ~4.89% (with fee) | £999 | ~£1,530 (+ fee) |
Fee or no fee? If you’ll keep the deal for the whole fix, a slightly lower rate with a fee often wins. If you expect to switch early, fee-free can be smarter. Do the 5-year maths, not just the headline.
Stamp Duty for first-time buyers (England, from April 2025):
0% on the first £300,000
5% on £300,001–£500,000
Over £500,000? FTB relief doesn’t apply
So a £325,000 home = 5% of £25,000 = £1,250 .A £300,000 home = £0 stamp duty.
Are 95% and 100% mortgages worth it?
Sometimes. They get you in sooner. That can beat another year of rent. But be clear-eyed:
Upsides: buy earlier, keep cash for moving and repairs, access to certain schemes.Trade-offs: higher rates, tighter checks, and you’re more exposed if prices slip.100% mortgages exist in specific situations. Treat them with caution and a proper buffer.
Rule of thumb: if a 10% deposit is only a few months away, waiting can pay you back through a cheaper rate.
Top 10 benefits (in real life)
You stop paying your landlord’s mortgage.
Fixed deals make bills predictable.
FTB stamp duty relief helps at typical Medway price points.
You build equity with each repayment.
Overpayments shave years (and interest).
Some deals include cashback or free valuations.
Product portability can make your next move easier.
You can plan renovations with confidence.
Strong payment history helps your credit.
With a broker, you see options you’d never find on your own.
Mistakes we see all the time - and how to dodge them
Chasing the lowest headline rate and ignoring a chunky fee.
No buffer for rate rises or repairs.
Applying before cleaning your bank statements (unarranged overdrafts, gambling, BNPL clutter).
New credit right before (or during) your application.
Forgetting the revert rate at the end of your fix.
Skipping insurance conversations—one illness can unravel a plan.
Alternatives worth a look
First Homes: discounted new-builds for FTBs meeting local criteria.
Shared Ownership: buy a share, pay rent on the rest; good for stretching locations.
Right to Buy/Acquire: if you’re eligible, discounts can be substantial.
Lifetime ISA (LISA): 25% government bonus towards your deposit if you qualify.
Family-assist/guarantor options: can bridge a deposit gap if everyone’s comfortable with the risk.
How long does it take—from AIP to keys?
Stage | Typical timing |
Mortgage in Principle | Same day or next working day |
Full application → mortgage offer | 2–6 weeks (lender/valuation dependent) |
Conveyancing & searches | 8–12+ weeks (this is where most delays live) |
Exchange → completion | Often 1–2 weeks, agreed in the contract |
If your case is straight-forward, it flies. If there’s a chain, lease quirks, or complex income, build in extra time.
Medway mini case study you can copy
Area: Rochester/Chatham Property: 2-bed flat at £300,000Buyer A: 10% deposit (£30,000) → Loan £270,000 Buyer B: 5% deposit (£15,000) → Loan £285,000
Buyer | LTV | Illustrative 5-yr fix | Product fee | Est. monthly | Stamp duty |
A | 90% | ~5.19% (fee-free) | £0 | ~£1,600 | £0 |
B | 95% | ~5.39% (+ fee) | £1,200 | ~£1,705 (+ fee) | £0 |
Takeaway: Buyer B gets the keys sooner, but pays more each month and over the fix. Buyer A saves over the term and has a bigger equity cushion. Neither pays stamp duty at £300k (FTB relief). Your numbers will differ—this shows the trade-off.
What’s changed in 2025—quick hits
FTB stamp duty: 0% to £300k; 5% to £500k (England).
High-LTV support continues, so 95% options remain widely available.
Two-year vs five-year fixed pricing is closer than last year; shop around.
More low-deposit choice than we’ve seen for a while.
Ready to move? Talk to Yomo Finance (Medway, Kent)
You don’t have to guess. Yomo Finance is your local, whole-of-market mortgage adviser in Medway. We’ll map out your budget, stress-test it, and show the true 5-year cost across lenders—then handle the paperwork so you don’t lose weekends to forms.
Next steps:
Book a free first-time buyer chat (phone or in person).
Get your MIP sorted fast.
We’ll compare fee-free vs fee-paid options and 5% vs 10% deposit paths.
Use our checklist below to speed everything up.
First-time buyer checklist (save this)
Passport/ID and proof of address
Last 3 months’ payslips (or SA302s + tax year overviews if self-employed)
Last 3–6 months’ bank statements
Proof of deposit (and gifted deposit letter if applicable)
Credit report (tidy any small snags)
Details of loans/credit cards/BNPL
Estate agent details and property particulars
Solicitor/conveyancer chosen
Building insurance ready for exchange
A small “repairs/moving” pot you won’t miss
FAQs
What deposit do first-time buyers need in the UK?
Most lenders accept 5%. 10% usually gets you a better rate and more choice. If jumping from 5% to 10% only takes a few months, run the numbers—you might save more by waiting.
How much can I borrow?
Plan on ~4.5× income as a starting point. Some lenders stretch to 5.5×–6× for the right profile. Self-employed or contractors can still buy—just expect extra checks.
Do first-time buyers pay stamp duty in 2025?
Many won’t. In England it’s 0% up to £300,000, then 5% on £300,001–£500,000. Over £500k, FTB relief doesn’t apply.
Is a 95% or 100% mortgage risky?
Higher LTV = higher rate and less wiggle room if prices dip. Sensible if renting is draining you and your income is steady. Have a buffer.
Fixed or tracker - what’s best?
If you like certainty, fix it. If you’ve got room in the budget and think rates will fall, a tracker can work. Your appetite for risk decides.
How long does it all take?
AIP can be same-day. Offer in 2–6 weeks. Conveyancing takes 8–12+ weeks. Chains and leasehold queries are the usual culprits for delays.
Final word
There isn’t one “best” mortgage for first-time buyers—only the best for you. If you want straight answers and local insight, Yomo Finance in Medway will lay out your options in black and white, including the real 5-year cost and what each choice means for your life, not just your spreadsheet.
Comments