First-time buyer mortgage rates

Are you considering buying your first home? Moving on the property ladder is a significant step. Our selection of first-time buyer mortgage deals might be able to assist you in getting the keys to your new home.

What are mortgage rates?

The interest rate on a mortgage is known as the mortgage rate. Mortgage rates are set by the lender and can be fixed (staying the same over a specified period of time) or TRACKER (this rate tracks the Bank of England Base Rate where you normally pay a set percentage above the base rate).

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How much can I borrow as a first-time home buyer?

To get an idea of how much you might borrow, view current interest rates, and compare monthly payments, use our online calculator. [ADD LINK]

When you apply for a first mortgage, the lender may want to go through your finances in detail. They’ll need to know your monthly income, outgoings, and living expenses. They’ll even look at how much of your monthly salary you spend.

Based on your wages, the lender can determine how much you can borrow. The overall mortgage you’ll be given will usually be no more than five times your annual salary. However, it would likely be lower. Each mortgage offer is made on an individual basis.

What mortgages can a first-time buyer get?

If you’re a first-time homebuyer, there are several excellent offers to help you get on the housing ladder.

Our comparison tools will help you find a first-time mortgage with the best rates and conditions for your needs. We can also get you exclusive deals with many lenders you will not find on the high street.

You’ll need to save money for a first-time buyer deposit before you begin. The amount of money you save will determine the type of interest rate you will get on your first home.

Compare first-time buyer mortgages

Choose a mortgage that could be available to you as a first-time buyer, and help you get on the property ladder. We can compare mortgages from the whole of the market so you don’t have to shop around because that’s our job. It’s what we do.

Compare mortgages for first-time buyers

A mortgage comparison tool will help you understand what types of mortgage offers are available for first-time buyers and which ones you may be eligible for based on your loan-to-value ratio. You’ll be able to compare sample mortgage quotes from various lenders once you type this information into our mortgage comparison tool.

Playing around with the calculator at the top of the tool to get an idea of how much you would be able to spend is a smart idea.

You’ll be able to see the monthly mortgage repayments on each deal, and if you click on “Product Details,” you’ll be able to learn more about any additional moving costs you’ll have to pay and how flexible the mortgage is. Since the comparison tool does not consider the financial status or credit history, it’s also crucial to get an agreement in principle. This will normally happen before you get your mortgage offer.

The comparison reveals the interest rate you’ll pay as well as any expenses you’ll have to pay, such as arrangement fees.

It also displays the gross loan-to-value on that particular mortgage. Some of the best prices are only open to those who have saved up 25% of the purchase price of the home they want. This is represented in the tables as a maximum LTV of 75%. It’s a smart idea to save up a bigger deposit if you want to find a lower interest rate for first-time buyers.

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Get in touch with of our mortgage saving experts today.

What type of first-time buyer mortgage should I choose?

You can get fixed-rate mortgages or tracker-rate mortgages if you’re buying a house (or a flat) for the first time. The choice is based on how much financial protection you need. The type of mortgage you select affects first-time buyer mortgage rates.

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Fixed versus Tracker Rates

The interest rate on a fixed-rate mortgage is guaranteed to remain the same for a set period of time. However, the payments may be a little higher than with the best tracker rate mortgages. The security of fixed payments could be appealing to a first-time homebuyer.

With a tracker mortgage, the interest rate can change. If the interest rate increases (often due to changes in the Bank of England base rate), your repayments will increase alternatively if the Bank of England Base Rate decreases then your monthly payments will go down.

The types of mortgages available to first-time buyers differ. The best mortgages for first-time buyers are determined by your situation. Learn more about the differences between fixed and tracker rate mortgages.

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For more details, call our Mortgage Saving Experts today.

How does a tracker rate mortgage work?

The interest rate you pay on a tracker rate mortgage will go up or down depending on the Bank of England’s base rate. If the Bank of England increases interest rates, your mortgage interest rate will rise as well. As a result, your monthly payments will rise. It can also function in the opposite direction. Your mortgage costs will decrease if interest rates decline.

If you believe interest rates will remain low for the duration of your mortgage, you will believe this is the best first-time buyer mortgage.

How does a fixed rate mortgage work?

The interest you pay on your home loan is fixed for a set period of time with a fixed-rate mortgage. For many years, you can patch it at the same cost.

If you want to know how much you’ll be paying per month for many years, this is the best first-time buyer mortgage. A fixed-rate mortgage is also seen as the best choice for a first-time buyer because it helps with budgeting.

How long should I fix my mortgage for if I’m a first-time buyer?

You usually have several options for how long you can fix your mortgage for. These are:

  • two years
  • three years
  • five years
  • 10 years.

When it comes to first-time buyer mortgages, each term length has its own set of advantages and disadvantages. Two- and three-year fixed-rate mortgages, for example, are often less expensive and have lower interest rates. Ten-year rates are higher when you first get them, but they can provide you with more financial stability in the long run.

Whatever term you chose, the fixed-rate mortgage will return to the lender’s Standard variable rate at the end of the term (SVR). The SVR is normally a higher rate than the initial rate you go on, Mortgage Saving Experts will call you 3 months before this happens to remortgage you to a new rate before the interest rate increases and goes to a variable rate. This way you save money, so the interest rate does not increase. That is of course providing we can help at that time.

Should a first-time buyer get a long term or short-term mortgage?

The amount of time you take your mortgage over is one of the most important considerations when selecting a mortgage. You can have a lot of options when it comes to choosing the best mortgage term. Terms may vary from five to 35 years, so that you may have a lot of options. Let’s compare the advantages and disadvantages of long and short-term mortgages.

Long term mortgages

Pros

A long-term mortgage could be the best option if you want to keep your mortgage payments as low as possible. Your repayments would be more sustainable and manageable if you spread your debt over a 35-year term, for example.

Cons

While your mortgage payments will be lower, it is likely to be much more expensive when all of your payments are added together. This is because a long-term loan would cost you more in interest than a short-term loan, and this interest will add up to a much greater sum over time.

Short term mortgages

Pros

Short-term mortgages are typically less expensive than those that are spread out for a longer period of time. This is because interest accrues more slowly, and the debt is paid off faster. Being debt-free sooner rather than later can be a liberating experience, allowing you to spend your money on other things and simplifying your finances.

Cons

While short-term mortgages are less expensive in the long run, your monthly payments would be higher than if you extended your mortgage term. Before determining how much to borrow, potential lenders will consider affordability. As a result, whether your income is modest or having a small deposit, obtaining a short-term mortgage for the sum you want can be difficult. Please contact our mortgage brokers if you need assistance seeking the best mortgage offer for you. We’ll sift through your financial situation and evaluate a large range of mortgage offers on your behalf before recommending the best options. In short it is ALWAYS better you take the mortgage over as shorter period as possible but that is your choice.

Want to know more?

Get in touch with of our mortgage saving experts today.

What you should know about Mortgage Rates

Making the right decision.

Remember that deciding on a rate is about more than just the amount of money you’ll spend per month. Keep in mind any relevant features to you, as well as any fees that can apply if you move mortgages.

Making sure you get your initial rate

After you’ve submitted your mortgage application and paid some upfront costs, you’ll be able to lock in your rate and it is secured. At any time, mortgage rates may be adjusted or removed unless you have submitted your mortgage application.

Minimum borrowing amount

For a first-time buyer, the minimum borrowing amount is at least £5,000, which is the minimum loan amount.

Minimum interest rate for tracker mortgages

Even if the Bank of England base rate falls, your tracker mortgage will generally never fall below a certain rate.

FAQs

Who do we include in this comparison?

We have mortgages from the whole of the market in the United Kingdom. They’re all from Financial Conduct, Authority-regulated lenders.

Does my credit record matter?

Yes, it can inform lenders whether you can keep up with mortgage payments.

Can I get an interest-only mortgage?

As a first-time buyer, you are unlikely to be given an interest-only mortgage. Most interest-only mortgages have criteria you need to meet to qualify for them i.e., you must have 50% of the property value in equity or deposit and the equity must have more than a certain amount in it such as £250,000. Different lenders have different criteria but generally for First Time Buyers with a small deposit it is not feasible.

Can I get a mortgage with no deposit?

If you’re looking for a first-time buyer mortgage, having no money down isn’t ideal. However, even if you don’t have a deposit, you can still purchase a home. Find lenders who consider borrowers looking for a 100% mortgage using our comparison tables. These types of mortgage require you to have parents who own a home which they can secure against their home or savings parents will need to put into a savings account and will be unable to touch for a certain period. For first-time homebuyers, most mortgages need a 5% deposit. However, some are available in addition to government-sponsored first-time homebuyer programmes to assist you in getting on the property ladder.

How much deposit do I need as a first-time buyer?

To get a mortgage, you normally need a deposit of at least 5%. E.g., if the LTV on a mortgage is 95%, you’ll need a 5% down payment. This equates to a £7,500 deposit on a £150,000 house. For the remaining £142,500, you’d get a mortgage. In our comparison charts, you’ll find 95% of mortgages for first-time buyers from various lenders.

Do first-time buyers get better mortgage rates?

The more money you have set aside for a down payment, the more equity (or ownership) you’ll have in your first home. You’ll be in a great spot to get better mortgage rates, which might result in lower interest rates and monthly payments.

Mortgage Lenders

Want to know more?

For more details, call our Mortgage Saving Experts today.

Want to know more?

Get in touch with of our mortgage saving experts today to find out how we can help.

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