The deposit
Most lenders want at least 5% of the purchase price as a deposit, and 95% mortgages are available — supported since July 2025 by a permanent government mortgage guarantee scheme that backs low-deposit lending on homes up to £600,000. But deposits work in steps: crossing from 5% to 10%, or 10% to 15%, often unlocks better interest rates, because lenders price by risk bands rather than smoothly.
If you're within a few months' saving of the next 5% step, a broker can work out whether the better rate saves more over the deal period than the extra months of rent cost.
5%the minimum deposit most lenders accept — each extra 5% often brings a better rate
The Lifetime ISA. 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. If you plan to use one, opening it early, even with £1, starts 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
- The mortgage guarantee route — you don't apply for this one; it works behind the scenes, encouraging lenders to offer 95% deals. The result is more low-deposit mortgages.
- 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. Check the whole monthly cost — rent, mortgage and service charge — and have a solicitor check the leasehold terms.
- 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 is available on the GOV.UK housing pages or with a broker.
Schemes reduce the entry price, not the total cost. Work out the full monthly cost — mortgage, rent element, service charges — before choosing one.
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 is often free and takes under an hour. It gives you a budget figure and shows estate agents you can borrow. It doesn't commit you to that lender, and many last 60–90 days.
Preparing for a mortgage application
Lenders check your recent history. 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.
- 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 what to prepare.
Budget for the full cost
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. On top of that: conveyancing, searches, the survey, possible lender fees, removals, and first-year costs. The full breakdown, with worked figures, is in our companion guide to the true cost of buying a home. The extras can add several thousand pounds.
Mortgage brokers
A whole-of-market broker sees deals across the 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; others charge a fee and tell you up front. Your own bank offers only its own products. More on how they work — and the questions to ask one — in our mortgage broker guide.
The path, start to finish
- If you use a Lifetime ISA, open it early (even with £1) to start the 12-month clock, then automate the deposit saving — see the savings habit guide.
- 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.