Buying your first home is an exciting step, but it can also feel like a minefield. There are deposits to save, mortgages to apply for, and hidden costs that can catch you off guard. With 2025 bringing some changes to the property market, now is a great time to get up to speed on what to expect.
If you’re considering making the leap onto the property ladder, here’s what you need to know.
- How Much Do You Need for a Deposit?
Your deposit is one of the biggest factors in securing a mortgage. The more you put down, the better the mortgage deal you’re likely to get.
- 10% deposit – This is the standard amount most lenders expect.
- 5% deposit – Some lenders offer 95% mortgages, but rates tend to be higher.
- 25% deposit or more – If you can stretch to this, you’ll unlock some of the best mortgage rates available.
If you’re still building your savings, a Lifetime ISA (LISA) could help. You can save up to £4,000 a year, and the government will add a 25% bonus (up to £1,000 per year).
Struggling to save enough? There are government-backed schemes designed to help first-time buyers, including:
- Mortgage Guarantee Scheme – Enables buyers to secure a mortgage with just a 5% deposit.
- Shared Ownership – Allows you to buy a share of a property and pay rent on the rest, with the option to increase your ownership over time.
- First Homes Scheme – Discounts of 30-50% on new-build properties for first-time buyers who meet certain criteria.
- Stamp Duty: What’s Changing in 2025?
Stamp Duty is a key cost to factor in, but first-time buyers benefit from lower rates. However, this is set to change on 1st April 2025.
Current First-Time Buyer Stamp Duty Rates (Until April 2025)
- No Stamp Duty on homes up to £425,000.
- 5% on the portion between £425,000 – £625,000.
- If the property is worth over £625,000, you don’t qualify for first-time buyer relief and must pay the standard Stamp Duty rates.
From 1st April 2025
- No Stamp Duty on homes up to £300,000.
- 5% on the portion between £300,000 – £500,000.
- If the property is worth over £500,000, you won’t qualify for first-time buyer relief and must pay the standard Stamp Duty rates.
What Does This Mean for You?
If you are already in the process of buying a property over £300,000, you might want to act quickly so you can benefit from the current higher tax-free threshold before 1st April 2025.
- Understanding the Mortgage Process
A mortgage is one of the biggest financial commitments you’ll ever make, so it’s important to understand how it works.
Before You Apply:
- Check your credit score – A good credit history can help you secure a better mortgage deal.
- Get a Mortgage Agreement in Principle (AIP) – This shows sellers and estate agents that you’re financially ready.
- Budget for extra costs – More on this below.
Types of Mortgages Available:
- Fixed-rate mortgage – Your interest rate stays the same for a set period, giving you stability.
- Variable-rate mortgage – The rate can go up or down, meaning your monthly payments could change.
- Interest-only mortgage – You only pay the interest each month, but you’ll need a solid repayment plan for the loan at the end of the term. While first-time buyers can access interest-only mortgages, they may have fewer lender options, as most providers prefer repayment mortgages for new homeowners.
A mortgage broker can help you compare deals and find the best option based on your financial situation.
- The Additional Costs to Consider
Aside from your deposit and mortgage, there are several extra costs involved in buying a home. These can add up, so it’s important to budget for them.
Legal & Mortgage Fees
- Solicitor’s Fees: £1,200 – £2,000
- Mortgage Arrangement Fee: £1,000 – £2,000
- Valuation & Survey Fees: £150 – £1,500 (depending on the property type and condition)
Moving Costs
- Removals: £150 – £2,000+ (depending on distance and volume of belongings)
Stamp Duty (if applicable)
- 0-5% depending on your property price (see Stamp Duty section above).
It’s worth using an affordability calculator to get an idea of how much you can borrow and what your monthly repayments will be.
- Finding the Right Property
Once your finances are in place, it’s time to start looking for the perfect home. Here are a few things to keep in mind:
- Location matters – Consider transport links, local amenities, and work commutes.
- Future growth potential – Some areas are seeing strong increases in property values, which could make your home a better long-term investment.
- Condition of the property – Look for any structural issues, signs of damp, or outdated electrical and plumbing systems. A survey can highlight potential concerns.
- Making an Offer and Completing Your Purchase
Once you find the right home, you’ll need to make an offer through the estate agent.
- If your offer is accepted, you’ll need to finalise your mortgage, instruct a solicitor, and arrange a survey.
- Your solicitor will handle the legal work, including contracts, searches, and Stamp Duty payments.
- Once contracts are exchanged, the purchase becomes legally binding, and you will pay your deposit.
- On completion day, you will receive the keys and officially become a homeowner.
Final Thoughts
Buying your first home is a big step, but with the right preparation, it can be a smooth and rewarding experience.
Key Points to Remember:
- Start saving early – The bigger your deposit, the better mortgage deals you’ll access.
- Consider Stamp Duty changes – If you’re buying over £300,000, you may benefit from acting before April 2025.
- Understand your mortgage options – Fixed, variable, or interest-only? Choose what works best for you.
- Budget for additional costs – Legal fees, surveys, and moving costs all add up.
- Think long-term – A good location and future growth potential could make a big difference down the line.
There’s a lot to think about, but you don’t have to do this alone. If you are considering your options and don’t know where to start, speak to us. A mortgage expert can help you make informed decisions and find the best way forward.
If you’re ready to take the first step, get in touch—we’re here to help.