The short version
Target a 10% deposit on a home in the £200,000–£350,000 band. Save inside a Lifetime ISA if you are aged 18 to 39 — the state pays in £1,000 for every £4,000 you contribute, up to age 50. When you find a home, budget for Stamp Duty Land Tax, which is nil for first-time buyers up to £300,000 and is charged at 5% on the slice from £300,001 to £500,000. Then borrow roughly 4 to 4.5 times your gross annual income on a mortgage you have stress-tested yourself at a rate 2 percentage points above the one you have been offered. Completion is usually eight to sixteen weeks from a successful offer. Keep about £3,000 in cash for the week after completion.
The hardest thing about buying a first home in the UK is not, on any objective measure, the buying. It is the waiting. Every stage of the process has a specific, knowable set of numbers attached to it — a deposit target, a bonus ceiling, a tax band, a loan multiple, a completion window — and each of those numbers is written down somewhere on a government website. What is rarely written down is the order in which a first-time buyer should meet them, and that is what makes the first year of saving feel like shouting into fog.
This guide tries to fix that. It walks through the five stages a typical English first-time buyer will pass through, in the order they actually occur, with the exact 2026/27 numbers that apply at each one and a link to the calculator that does the arithmetic. It is written for a PAYE employee buying a single freehold or leasehold property in England or Northern Ireland; Scottish Land & Buildings Transaction Tax and Welsh Land Transaction Tax are flagged but not covered in detail.
01The deposit
A deposit is the slice of the purchase price you fund yourself. Lenders speak in loan-to-value (LTV) ratios: a 90% LTV mortgage means the bank lends 90% and you provide the other 10%. The mainstream lending market starts at 95% LTV — a 5% deposit — but the cheapest rates do not appear until LTV drops to 90%, 85%, and especially 75% or lower. The largest single lever on your monthly payment over the next thirty years is not what interest rate you chase; it is what LTV band you enter at.
Ten percent is the pragmatic target for most first-time buyers. Five percent is possible but expensive; twenty-five percent is the point at which rate savings level off. For a £280,000 home, that is £28,000 saved.
How long does saving £28,000 take? That depends only on monthly surplus and interest. If you are stashing £600 a month in an account paying 4.5% gross, you are in range inside three and a half years. If you are stashing £1,200 a month in the same account, you are inside twenty months. The calculator below will show you the exact curve.
Compound Interest CalculatorHow a monthly direct debit turns into a deposit, with interest compounded monthly.Where to keep the deposit
A deposit is short-horizon money. The rule of thumb is that any money you need inside five years should not be in the stock market — not because the market is likely to crash, but because the consequences of a crash landing inside your completion window are asymmetric and horrible. Cash savings accounts, premium bonds and cash ISAs are the three reasonable vehicles. Fixed-rate bonds pay a little more but lock the money up, which can clash with the moment you actually need it.
The exception to the cash rule is the Lifetime ISA, which deserves a section of its own because its economics are good enough to override the usual cash-only advice for first-time buyers — even when it holds equities.
02The Lifetime ISA
The Lifetime ISA, universally abbreviated to LISA, is a small, specific, and unusually generous government scheme. If you are between the ages of 18 and 39 (you must open the account before your 40th birthday), you can save up to £4,000 per UK tax year into a LISA and the Treasury will add a 25% bonus — up to £1,000 a year, paid monthly. The bonus continues on further contributions up to the day before your 50th birthday.
The money, plus the bonus, plus any growth, can be withdrawn tax-free in exactly two situations: buying your first home (priced up to £450,000), or retirement from age 60. Any other withdrawal triggers a 25% penalty on the full amount withdrawn, which — because of the way the maths works — leaves you slightly worse off than if you had never put the money in. The LISA is, in other words, a one-way door with a very good reward and a sharp exit tax.
For a first-time buyer who opens a LISA at 25 and contributes the maximum £4,000 every year for five years, the government will have added £5,000 by the time a purchase is made. Compounded at a modest cash rate, that is enough to move a 5% deposit into 10% LTV territory on a £280,000 home — which is an entire mortgage-rate band of improvement. Few other interventions in UK personal finance offer a return this large for so little work.
Lifetime ISA CalculatorYour contributions + bonuses + growth, year by year, to the day you buy.The three hard edges of a LISA. First, you must have held the account for at least twelve months before using it for a property purchase, or the bonus is not payable. Second, the property must be £450,000 or less — a ceiling that has not moved since 2017 despite house-price inflation. Third, if you inherit a house and then use a LISA on another purchase, you are no longer a first-time buyer for LISA purposes and the 25% penalty applies. Open the LISA at least a year before you plan to buy.
LISA versus Help to Buy ISA
The older Help to Buy ISA is closed to new applicants as of 2019 but a cohort of first-time buyers still holds one. If you do, you can continue contributing and claim the 25% bonus on purchase — but you cannot hold both a Help to Buy ISA and a LISA and use both bonuses on the same property. The LISA bonus is almost always larger because its annual cap is £1,000 versus the Help to Buy ISA's £200 a month capped at £3,000 total. If you are deciding between the two, the LISA wins in most scenarios. If you already hold a Help to Buy ISA and are close to purchase, keep it.
03Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is a tax on the buyer, paid within fourteen days of completion. Your solicitor files the return and sends the money to HMRC as part of the completion wire. You will never write a cheque to HMRC yourself — but it comes out of your deposit or your bank balance on day one, not absorbed into the mortgage, and underestimating it is the single most common budgeting mistake a first-time buyer makes.
For first-time buyers in England and Northern Ireland, the 2026/27 SDLT schedule is:
| Slice of purchase price | Rate (first-time buyer) |
|---|---|
| £0 – £300,000 | 0% |
| £300,001 – £500,000 | 5% |
| Over £500,000 | First-time buyer relief lost — standard rates apply on the whole price |
The cliff edge at £500,000 is severe and deliberate. A first-time buyer purchasing a £499,999 home pays £9,999.95 in SDLT; one purchasing a £500,001 home pays £10,000.05 in SDLT on that same £500,001 under standard rules. Stretching one pound over the line is, arithmetically, fine — the standard-rates calculation still comes out close. What actually damages buyers is agreeing a purchase at £505,000 when the true market price is £495,000, because the relief is lost and the whole of the price is re-tariffed.
A worked example. On a £340,000 home — a reasonable target for a first-time buyer in a mid-tier town — the SDLT due is 5% of the slice from £300,001 to £340,000, which is 5% × £40,000 = £2,000. Due in full on completion.
Stamp Duty CalculatorWorks SDLT across first-time buyer, standard, additional-dwelling and non-resident bands.Scotland and Wales
SDLT applies only in England and Northern Ireland. Scotland has its own Land & Buildings Transaction Tax (LBTT) with different bands and a first-time buyer relief up to £175,000. Wales has Land Transaction Tax (LTT), which has no first-time buyer relief at all but a higher starting threshold. If you are buying in Scotland or Wales, do not rely on the English numbers above; our SDLT calculator has devolved modes, and the Revenue Scotland and Welsh Revenue Authority websites are the ground truth.
04The mortgage
The mortgage is where the largest numbers appear and where the most emotional mistakes are made. A lender has exactly one interest at this stage: that you can afford the monthly payment under a stress-tested rate. You, by contrast, have two interests that are quietly in tension: to be lent as much as possible so you can buy the home you want, and to be lent no more than you can comfortably repay if your circumstances change.
How much you will be offered
UK mainstream lenders offer, roughly, 4.0 to 4.5 times gross annual income for a single applicant, and 3.5 to 4.25 times joint income for a couple. A first-time-buyer couple earning £45,000 and £35,000 gross will typically be offered between £280,000 and £340,000. Some specialist lenders go higher — 5 and occasionally 5.5 times — for borrowers with clean credit files and strong deposits. Income multiples are not the only test: lenders also run an affordability calculation that looks at committed outgoings (childcare, loans, credit cards) and applies a stress rate to check you could still pay at 7–8%.
How much you should borrow
The mortgage a lender offers is an upper bound, not a recommendation. A sensible self-test is to take the monthly payment at your offered rate, add two percentage points to the rate, recalculate the payment, and ask yourself honestly whether you could still pay it if your household income dropped by 20%. If either answer is no, borrow less.
Mortgage CalculatorMonthly payments, total interest and LTV sensitivity across fixed-rate terms.Fixed, tracker, and the discount game
UK mortgages almost always start with a fixed-rate period — most commonly 2, 5 or 10 years — after which the loan reverts to the lender's Standard Variable Rate (SVR). Nobody pays the SVR intentionally; it is a punitive rate designed to push borrowers into remortgaging. Two-year fixes are cheapest headline but force you back into the remortgage market every two years, each time with fees. Five-year fixes are the mainstream first-time buyer choice: a predictable payment for long enough to outlast one full economic cycle, at a rate only slightly above the two-year.
Tracker mortgages — which move up and down with the Bank of England base rate plus a margin — are worth considering only when markets expect base rate cuts and you can absorb the risk of the opposite. For most first-time buyers, a five-year fix is the quiet, unexciting, correct choice.
The paperwork the bank will want
Expect to provide: three months of bank statements for every account you hold; three months of payslips; the last two years of P60s (or two years of SA302s if self-employed); proof of deposit source (a bank statement showing the money accumulated, or a gift letter from the parent giving it); ID; proof of address. First-time buyers underestimate how invasive this is. The bank is legally obliged to ask; your job is to have the documents ready and not to be defensive about a one-off takeaway spend from 2024.
05Completion and the week after
A typical first-time buyer timeline, from accepted offer to moving in, runs eight to sixteen weeks. The bottleneck is almost never the mortgage or the buyer: it is the chain of solicitors, searches, and — if the property is leasehold — the freeholder's management pack. Chasing your solicitor is not rude. It is expected and necessary.
What actually happens on completion day
On completion morning, your solicitor wires the purchase money (your deposit + the mortgage drawdown) to the seller's solicitor. The seller's solicitor confirms receipt, the estate agent releases the keys, and you are a homeowner. Over the next fourteen days, your solicitor files the SDLT return and pays the tax, registers the property in your name at HM Land Registry, and sends you the Title Information Document. Keep that document safe — it is the modern replacement for the old paper deeds.
The other costs no-one warns you about
| One-off cost on a £280,000 first home | Typical range |
|---|---|
| Mortgage arrangement / booking fee | £0 – £1,500 |
| Property valuation (often included) | £0 – £400 |
| Building survey (Level 2 or 3 RICS) | £400 – £1,200 |
| Conveyancing solicitor | £1,000 – £2,000 |
| Land Registry fees + local authority searches | £250 – £450 |
| Removal van | £300 – £900 |
| Building insurance (required from exchange) | £250 – £500 per year |
| Realistic all-in extras (excl. SDLT) | £2,200 – £6,500 |
These are in addition to SDLT and in addition to the deposit. A first-time buyer with exactly enough saved for the deposit and nothing else will reach completion day solvent but brittle — one burst boiler away from debt. Keep a cash buffer of £2,000 to £3,000 beyond the deposit, ringfenced for the first six weeks after moving in.
Day-one housekeeping
Inside the first week: change the locks (the previous owners almost always have spare keys somewhere), take meter readings the moment you move in and photograph them, notify your council of the move-in date to register for council tax, and transfer utility accounts into your name. Inside the first month: update your address with HMRC (the online tax account is the fastest route), your bank, your employer's payroll, and the DVLA. None of this is hard; all of it gets forgotten.
The keys are not the end of the process. They are the start of a thirty-year arrangement between you and a lender. Treat that arrangement like a serious one.
The five most common first-time buyer mistakes
- Stretching to the lender's maximum offer. Banks are not wrong about affordability but they are not on your side either. A 20% lower mortgage is a lifetime of optionality.
- Forgetting the cliff at £500,000. First-time buyer SDLT relief evaporates entirely at £500,001. If a property is listed between £505,000 and £530,000, negotiate hard or walk.
- Buying on a two-year fix when you will stay longer. Remortgage fees eat the rate saving. Five-year fixes look dull because they are; they work.
- Skipping the survey. A Level 2 RICS survey on a £280,000 home costs under £600 and uncovers issues that routinely cost £5,000+ to fix. It is never the place to save money.
- Running the bank account to zero for completion. Keep a buffer. Things break in the first month of ownership because the previous owner was not going to pay to fix them on the way out.
A note on advisors
You do not strictly need a mortgage broker. You probably want one. A good fee-free broker (paid by the lender, not by you) has live access to products that do not appear on comparison sites and can spot application details that would otherwise cause a decline. A good conveyancing solicitor is even more important; the cheapest quote is rarely the best use of money at this stage of your life.
This guide is general information, not regulated financial advice. For a specific recommendation, find a Chartered Financial Planner through the CISI register or an adviser through the FCA register.