Buying a first home is the biggest purchase most people ever make, and the industry around it can make it feel deliberately confusing — schemes with similar names, acronyms nobody explains, and costs that only introduce themselves after you've fallen for a kitchen. Here's the plain version: what you actually need, the free money many first-time buyers leave unclaimed, and the sequence that takes you from saving to keys without the expensive surprises.
The deposit — what you really need
Most lenders want at least 5% of the purchase price as a deposit, and 95% mortgages are genuinely available — supported since July 2025 by a permanent government mortgage guarantee scheme that backs low-deposit lending on homes up to £600,000. So 5% gets you in the game. But deposits work in steps: crossing from 5% to 10%, or 10% to 15%, usually unlocks noticeably better interest rates, because lenders price by risk bands rather than smoothly.
That has a practical consequence: if you're within a few months' saving of the next 5% step, it's often worth the wait — the better rate can save you more over the deal period than the months of rent cost you. A broker can show you both versions of the sums for your actual numbers.
5%the minimum deposit most lenders accept — but each 5% step you add usually buys a better rate
The LISA — free money with rules attached. A Lifetime ISA is the single best deposit tool for most first-time buyers. You can pay in up to £4,000 a year, and the government adds a 25% bonus — up to £1,000 a year. The rules, all verified on GOV.UK: you must make your first payment before you turn 40; the home must cost £450,000 or less, be in the UK, and be bought with a mortgage; the account must have been open at least 12 months before you use it; and your conveyancer receives the money directly. Withdraw for anything other than a first home or retirement and a 25% charge applies — which takes back the bonus and a slice of your own money. Open one early, even with £1, to start the 12-month clock.
Say you save £333 a month into a Lifetime ISA — almost exactly the £4,000 annual maximum. Each year the government adds £1,000. After four years you've paid in £16,000, received £4,000 in bonuses, and hold £20,000 before a penny of interest or growth. That's a 10% deposit on a £200,000 home, or 8% on £250,000. Buying with a partner who also saves into their own LISA? You can each use your savings and bonus on the same home, provided you're both first-time buyers and the home is within the £450,000 cap — so a couple on the same plan holds £40,000 in four years, £8,000 of it from the government. (Figures illustrative; rules current at the time of writing.)
The schemes worth knowing about
- The mortgage guarantee route — you don't apply for this one; it works behind the scenes, encouraging lenders to offer 95% deals. What you see is simply more low-deposit mortgages on the shelf.
- Shared ownership — buy a share of a home and pay rent on the rest, with the option to ‘staircase’ to bigger shares later. It lowers the entry cost meaningfully, but read the whole package: rent plus mortgage plus service charge, and leasehold terms that deserve a careful solicitor.
- First Homes and local schemes — England runs a discount scheme for eligible first-time buyers and key workers in some areas, and schemes come and go with governments. Check what's live when you're ready — the GOV.UK housing pages and any decent broker will know.
A rule of thumb for all schemes: they reduce the entry price, not the total obligation. Model the full monthly cost — mortgage, rent element, service charges — before deciding a scheme is the bargain it first appears.
Get a mortgage in principle early
Before you book a single viewing, get a mortgage in principle — a lender's indication, based on your income and credit profile, of roughly what they'd lend you. It's usually free, takes under an hour, and does two important jobs: it converts your budget from a hope into a number, and it makes estate agents treat you as a serious buyer rather than a browser. It doesn't commit you to that lender, and a well-timed one (many last 60–90 days) means you can offer with confidence the day you find the right place.
Make yourself the buyer lenders say yes to
Lenders read your last few months like a reference. In the six months before you apply:
- Check your credit report with all three agencies (statutory reports are free) and fix errors — a wrong address or a phantom default can cost you a deal.
- Get on the electoral roll at your current address — it's one of the easiest score boosts there is.
- Avoid new credit in the run-up: no car finance, no new cards, and go carefully with buy-now-pay-later, which increasingly appears on credit files.
- Keep bank conduct clean — steer clear of the overdraft and avoid a statement full of gambling transactions in the months a lender will read.
- Gather the paperwork early: typically three months of payslips and bank statements, ID, and proof of deposit. Self-employed? Expect to show two or three years of accounts or tax returns — our self-employed money guide covers getting those ducks in a row.
Budget for the full cost, not just the deposit
The deposit is the headline, but completion day brings friends. The good news first: first-time buyers in England and Northern Ireland currently pay no stamp duty up to £300,000, and 5% only on the portion between £300,001 and £500,000 — though the relief disappears entirely on homes over £500,000, and Scotland and Wales run different systems. Then the rest: conveyancing, searches, the survey, possible lender fees, removals, and the first-year costs every new owner discovers. The full breakdown, with worked figures, is in our companion guide to the true cost of buying a home — read it before you set your target, because the extras can easily add several thousand pounds.
Use a broker
For a first mortgage especially, a good broker earns their place: they see deals across the whole market including ones you can't access directly, they know which lenders suit your quirks — new job, self-employment, a thin credit file — and they handle the application paperwork. Many are paid by the lender, so the advice costs you nothing; others charge a fee, and will tell you up front. Walking into your own bank gets you one shelf of products. A broker gets you the shop. More on how they work — and the questions to ask one — in our mortgage broker guide.
The path, start to finish
- Open a Lifetime ISA (even with £1) to start the 12-month clock, then automate the deposit saving — the savings habit guide is the machinery for this step.
- Six months out: clean up your credit file, electoral roll, bank conduct and paperwork.
- Get a mortgage in principle, and only then start viewing seriously.
- Offer with your full budget in mind — deposit, stamp duty position, fees and first-year buffer.
- Instruct a conveyancer, book the right level of survey, and keep your emergency fund out of the deposit pot.
Buying your first home is daunting, but it's a well-trodden path with a genuinely generous bonus scheme at the start of it. Get the LISA working early, make yourself lender-ready, budget for the whole bill, and lean on a broker for the market. Do that, and the fog turns into a checklist.