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Where Can I Get the Best First-Time Buyer Mortgage Rates?

We appreciate that first-time house buyers are taking a huge step and often need independent, professional advice to make informed choices, with first-time buyers help to select lenders and products that are a good fit.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-06-15
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Where Can I Get the Best First-Time Buyer Mortgage Rates?

First-time buyer mortgage rates can vary considerably, depending on the lender, your circumstances, how much you want to borrow, and the type of mortgage you apply for. A lot also depends on whether you're using a first-time buyers scheme and if you qualify for first-time buyer stamp duty relief.

Regardless of those variables, we appreciate that first-time house buyers are taking a huge step and often need independent, professional advice to make informed choices, with first-time buyers help to select lenders and products that are a good fit.

Getting the best first-time buyer mortgage rates can impact your long-term financial situation, so we’ll run through some information to help first-time house buyers understand how the process works.

Which UK Lenders Offer Mortgages to First-Time House Buyers?

It can be tricky to work out which banks or mortgage providers offer first-time buyers help with purchasing a property – and which will consider applications from first-time house buyers with non-standard criteria.

Much depends on whether you’re looking for a mortgage as part of a first-time buyers scheme. For example, only a small number of lenders provide guarantor mortgages, but there are many more enrolled in the mortgage guarantee first-time buyers scheme.

In most cases, first-time buyer mortgage rates from mainstream banks are higher than elsewhere, with stricter eligibility criteria. That is because banks don't specialise in mortgages for first-time house buyers, so they aren't often the most competitive.

An independent broker can assess your borrowing requirements and recommend the lenders most likely to approve your application and with the most favourable first-time buyer mortgage rates.

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Based on your yearly income,
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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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What Are the Average First-Time Buyer Mortgage Rates?

Interest rates fluctuate considerably, and while they have risen steeply over the last few months, that doesn’t mean all first-time house buyers will expect to pay the highest rates.

Higher Bank of England base rates inevitably mean that average first-time buyer mortgage rates will increase, but you can still access mortgages for first-time house buyers with rates beginning at between 3-4%.

One of the important factors first-time house buyers often overlook is the fee structure, which is payable on top of the interest. Products that look to have great first-time buyer mortgage rates but costly arrangement or product fees may be much less attractive than they first appear.

Are There Mortgages Designed for First-Time House Buyers?

While some lenders have general products that may be suited for first-time house buyers, others offer specialist products that have different first-time buyer mortgage rates than other mortgages.

Not every lender offers first-time buyers help with product selection, but we can suggest mortgages designed for first-time house buyers with low deposit requirements, cash-back incentives, free legal costs or complimentary valuations.

Other products may also be a good option for first-time house buyers, such as fixed-term mortgages with lower interest rates for first-time buyers or reserved for applicants who qualify for first-time buyer stamp duty relief.

Some of the most beneficial mortgages for first-time house buyers are not available on the general market or are offered by niche lenders who only deal with approved brokers, so it’s well worth getting in touch to establish whether you can get a better deal.

Finding a First-Time Buyers Scheme to Help With Mortgage Costs

First-time house buyers can apply to varied initiatives, either intended to make buying a home easier, reduce the costs, limit the deposit savings required, or make it more likely a lender will approve first-time house buyers.

The Shared Ownership First-Time Buyers Scheme

Shared Ownership is managed by local housing authorities, primarily aimed at first-time house buyers but sometimes open to all eligible applicants. This scheme provides first-time buyers help by allowing them to purchase a share of the home, paying a nominal rent on the balance.

If you can't afford the level of deposit you would need to access the lowest first-time buyer mortgage rates; Shared Ownership can help you buy a property in stages rather than outright.

First Homes for First-Time House Buyers

The First Homes scheme provides discounts on new build properties for low-income first-time house buyers, offering discounts of 30% to 50% on the market price.

First-Time Buyers Help Through Right to Buy

Tenants living in public sector or council housing can apply for a first-time house buyers mortgage through Right to Buy (or Right to Acquire) if they have lived in a property for a long time and receive a discount on the purchase value.

Lifetime ISAs for First-Time House Buyers

Lifetime ISAs, or the first-time house buyers ISA, allows those saving for a deposit on a new home to achieve interest contributions of 25%, with a maximum deposit of £4,000 per year. While this first-time buyers scheme isn't directly related to a mortgage, it means you can boost your savings by up to £1,000 annually.

Please note that the Help to Buy first-time buyer schemes have now closed, but the Lifetime ISA remains open to new applicants.

How to Choose the Right First-Time House Buyers Mortgage

Experienced brokers have ample experience helping first-time house buyers achieve the most competitive first-time buyer mortgage rates available, comparing hundreds of lenders and products to make independent suggestions.

We don’t recommend using price comparison sites to select the lowest first-time buyer mortgage rates, as these reflect only a small proportion of the mainstream market.

The best way forward is to speak to Revolution Finance Brokers to request first-time buyers help, and we’ll arrange a good time to speak about your circumstances and begin the process to secure the best first-time buyer mortgage rates.

Mortgage Alternatives for First-Time House Buyers

If you’re struggling to find first-time buyer mortgage rates that are affordable in the current climate, all is not lost. We’ll be happy to run through the options to find first-time buyers help and suggest those schemes that may be relevant.

Alternative options for first-time house buyers might include a guarantor mortgage if you don’t have a sufficient deposit to qualify for manageable first-time buyer mortgage rates. Other products, such as family springboard or offset mortgages, can be suitable for first-time house buyers whose family members are happy to help.

However, in many cases securing the best first-time buyer mortgage rates isn’t so much about the product – it’s about finding the lender who is most likely to approve your application, accept your deposit, and allow you to move forward into your new home.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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Frequently Asked
Questions

The best interest rates are always reserved for applicants with a low Loan to Ratio or who have a high deposit and don't need to borrow as large a proportion of the total property cost. If you need first-time buyers help, you could use the mortgage guarantee scheme or enhance your down payment through a Lifetime ISA to lower your first-time buyer mortgage rates.

Some first-time buyers help initiatives are applied automatically such as selecting a mortgage guarantee scheme product from a lender. Others rely on you applying for support, such as Shared Ownership.

A lot depends on the first-time buyers scheme eligibility criteria since some are designed for low-income households, whereas others are open to all first-time house buyers.

If you’d like assistance working out which first-time buyers scheme may be useful and which you are likely to qualify for, please contact Revolution Finance Brokers at your convenience.

Yes, first-time house buyers have a higher tax-free threshold and can buy a property in England up to the value of £300,000 without incurring a stamp duty liability. However, if you are unsure whether a property qualifies for first-time buyer stamp duty relief, it is important to verify this beforehand.

For example, if two joint first-time house buyers assume they qualify for first-time buyer stamp duty relief and then find they don't because one person had previously inherited a property, it could increase the purchase costs by several thousand pounds.

No, the Help to Buy first-time buyer ISA has closed, although the Lifetime ISA remains open. The Help to Buy first-time buyer equity loan programme has also closed, and there are no plans as yet to replace it with a new scheme.

First-time home buyers can use several alternatives, such as Shared Ownership, First Homes and Right to Buy, but of course, the first-time buyers scheme that is relevant to your circumstances might mean that some options are not appropriate.

In essence, if you have a larger deposit, it means the lender isn't loaning you as much against the value of the property. Their risk is reduced since first-time house buyers are sometimes perceived as a naturally higher risk than other mortgage applicants.

If the lender were to end up repossessing the property and selling it in a liquidation sale due to non-payment by the first-time home buyers, the higher deposit means they have a much better chance of recouping all of the debt.

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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