You’ve reached that important milestone when you’ve saved up enough for a deposit, and you’re about to start your property search.
However, there are still some things to bear in mind before that dream of your first home can become a reality. Read our guide to find out more about how you can prepare financially and avoid some common mistakes.
When you apply for a mortgage, the lender will look at whether you can afford the monthly repayments. You will have to provide evidence of your household income and expenses, and all your ongoing financial commitments, including credit cards, debts and loans. If you’re thinking about buying your first home, it’s important to review your finances in advance of any mortgage application, and take action if it’s needed.
Lenders will normally only allow mortgage applicants to borrow a certain multiple of their annual income. The standard rate is no more than 4.5 times what you and your partner earn in a year. So if your annual household income is £50,000, the amount you can borrow will usually be capped at £225,000. All lenders will have slightly different limits. But you should be wary of going right up to this maximum amount. Any change in circumstances could put pressure on your ability to keep up with mortgage payments.
The costs of buying a house can add up, even after all those years of saving up for a deposit. You should factor in the following when buying for the first time:
Lenders conduct a credit check on all customers making new mortgage applications. This takes into account your credit history, looking at how debt has been managed, and whether payments have been made on time or missed.
Lenders will use the credit check to assess the risk of an applicant, so it is advisable to avoid entering into any new credit card, hire purchase or loan agreements immediately before applying for your mortgage.
Buying something big – like a car, or any item that involves a long-term finance agreement – is not a good idea if you’re about to apply for a mortgage. You want to be reducing your financial commitments at this point, not extending them. This is a good time, in fact, to budget for what you might need to buy once you’ve moved into your new home.
If you know you’ve had a low credit score in the past, you shouldn’t ignore it. But equally, it shouldn’t stop you from applying for a mortgage. There are changes you can make that will improve your credit score over time.
That all important deposit can take years to save up for. Whether it’s 5% or 10% of the purchase price, or higher, your deposit can unlock mortgage deals and bring you closer to the dream of buying your first home.
It can be tempting to put everything you have into it, including any savings you’ve built up. However, try to avoid doing this.
It’s always good to have savings to fall back on, for those unexpected emergencies, and for general wellbeing and a sense of financial security. Ask yourself what would happen if you suffered a loss in earnings, were made redundant or found yourself unable to work for a period of time?
You want to be able to enjoy living in your first home – having enough money left after you make your mortgage repayments for living expenses, savings, holidays and treats. You might be thinking about starting a family too, or putting money into a pension. A dream home can become a nightmare if you simply can’t afford it.
A mortgage lender will usually be able to check on what is affordable, and they will conduct stress tests to see how your finances would be affected by a rise in interest rates.
Your mortgage payments should not only be manageable and affordable but also enable you to have a good standard of living.
You should budget for what you will be regularly paying each month to live in your home, aside from mortgage costs:
A good rule of thumb is to not spend more than a third of your monthly income on mortgage repayments and housing costs.
If you think you might struggle to get on the property ladder, there are a number of government schemes available that help first-time buyers, like Lifetime Individual Savings Accounts (LISA) and Shared Ownership.
Persimmon can also give a helping hand with a range of homebuying options:
Everyone’s circumstances are different, but here are our five key tips for first time buyers to get mortgage ready:
From helping you save for a deposit, to understanding more about mortgages and affordability, we’re here to make the journey to buying your first home easier.
Find out more in our First-Time Buyers Hub:
These stories explore how couples navigated the buying process and found a home they love that suited both their lifestyle and future plans.
Choose your ideal location, explore our homes, and find a place you’ll love.
Learn how to set your homebuying budget, from deposits and mortgages to extra costs.
Understand mortgages, credit scores, lender checks and how to get mortgage‑ready as a first‑time buyer.
Find out how much deposit you need, the average first‑time buyer deposit, and the best ways to save faster.
Discover how to buy your first home faster with expert help, flexible options and tailored support.
Learn to budget, search and view homes, compare options, and make an offer on your first home.
Learn what completion day means and what happens between offer acceptance and completion.
First-time buyer guides covering everything you need to buy with confidence.
Explore real stories from first-time buyers using schemes to find their dream home and settle in.
