First Time Buyer Mortgage

Find the best first time buyer mortgage for your circumstances

With the recent increase in the base rate by the Bank of England mortgage rates are starting to rise

See whether you can save money on your mortgage using our independent service or you can call us on 0117 980 7743 (8.30am to 6pm – Monday to Friday)

What deposit do I need for a first time buyer mortgage?

In normal circumstances a 5% deposit of the value of the property you are looking to buy is required.

As a result of the pandemic most lenders require a 10% deposit.

If you are new to mortgages as a first time buyer there are a number of things you need to be aware of.

In selecting a mortgage you should:

• Seek to ensure that the mortgage suits your circumstances
• Ensure you borrow what you can afford
• Build in flexibility so that if your circumstances change there is room to adapt e.g. a change of job

In selecting a mortgage you have different options.

You can go to a lender direct who will provide help and assistance about their own mortgage products or you can use the service of a mortgage broker who will be able to look at a wider panel of mortgage products.

Help To Buy Mortgages

This scheme helps you get on the property ladder by making the cost of a mortgage more affordable.

It allows you to take out a loan which you then add to your deposit for a house you want to buy.

The scheme is available to first time buyers and homeowners looking to move.

The home you want to buy must be newly built with a price tag up to £600,000.

The scheme allows you to put down a smaller deposit with up to 20% of the cost covered by a shared equity loan.

Example:

Property Purchase price – £200,000

Your cash deposit – £20,000 (10%)

Shared Equity Loan – £40,000 (20%)

Your Mortgage – £140,000 (70%)

What does it cost?

• You are not charged fees for the first 5 years of owning your home
• There is no interest to pay on the loan for the first 5 years – after that you pay a fee of 1.75% of the loan’s value. This increases by RPS (Retail Price Index) which is a measure of inflation plus 1%.
• Paying fees do not count towards paying back the loan amount.

What happens if you sell your house?

So the scheme requires you to pay back the loan or sell your house after 25 years. How much you pay back will depend on the market value of your house at that time.

Example:

Market Value                                          Equity loan taken out                                   Amount

House bought for £200,000                         20%                                             Borrowed £40,000

Sold for £250,000                                               20%                                             Pay back £50,000