First Time Buyer

First Time Buyer

Buying your first home can be one of the biggest financial decisions you can make – and one of the most rewarding. Let us help you onto the property ladder and into your own home.

Rates from 0.92%*

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You would be classed as a first time buyer if you (and the person you are buying your home with) have never owned a property before.

The term “first time buyer” is a little misleading – a better way to think of it is as “first time owner.” For example, if you have inherited a property and are now looking to buy, you would not be classed as a first time buyer.

This doesn’t apply to ownership of purely commercial property, like a shop, or hair salon with no living space attached. If you owned a property like this, you would still be classed as a first time buyer.

Generally speaking, you’ll need to put down at least 5% of the property’s value as a deposit. The more you can put down for the deposit, the less you’ll need to borrow, and this can sometimes mean you can get a better rate. Some lenders will accept a deposit that’s been gifted to you by your parents or other family members.

LTV means “Loan to Value” – the amount you are borrowing with your mortgage compared to the value of the house you are buying.

For example, let’s say the house you’re after costs £200,000. You have a deposit of £20,000 and want a mortgage for the remaining £180,000. Your LTV would be 90%. 

As of 1 July 2021, if you are a first time buyer, you won’t have to pay any Stamp Duty Land Tax (SDLT) on properties up to the value of £300,000.

If the value of your property is between £300,001 and £500,000, you will have to pay 5% SDLT on the excess amount over £300,000.

For example, if your property is worth £400,000, you would pay nothing on the first £300,000, and then 5% on the remaining £100,000, meaning that you would pay £5,000 in SDLT.

Your solicitor will normally handle the payment of stamp duty as part of their service – but remember, you’re ultimately responsible for making sure it’s paid.

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Representative example: A mortgage of £187,500 payable over 25 years, initially on a fixed rate of 1.64% for 2 years and then a standard variable rate, currently 3.59%, for the remaining 23 years. This would require 24 monthly payments of £762.36 and then 276 monthly payments of £933.31 (this includes a broker fee of £995 to be paid upon completion). The overall cost for comparison is 3.3% APRC.