Jasmine Birtles
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Latest First Time Buyer Mortgage News
Annie
25th Sep 2025
First time buyer mortgages are tricky to navigate especially with so many options available. This article covers the best first time buyer mortgages available right now, and tips to help you get your first mortgage.
What is a First Time Buyer Mortgage?
Just £7,000 Deposit for a £350k Property
Other First Time Buyer Mortgage Options
The Risk of Large Loan to Value Mortgages
Tips to Get Your First Mortgage
What Is a First Time Buyer Mortgage?
If you have never owned property before, you could be eligible for a first time buyer (FTB) mortgage. There are lots of restrictions and they vary between mortgage providers and even mortgages within the same provider. The key thing is you must never have owned property before. This includes property you inherited or that someone else, like your parents, has put your name on the title deeds.
If you’re buying with a partner, friend, or family member who has previously owned property, all is not lost. You can buy a property as a first time buyer with someone who is not one, and still make the most of great first time buyer deals.
Is £7,000 for £350k Mortgage Too Good to Be True?
Newcastle Building Society recently launched a whopping 98% mortgage deal for first time buyers. That means if your property price is £350,000, you only need £7,000 for your deposit.
The minimum you can borrow for the First Step Mortgage is £96,000 and the maximum is £350,000. You need to put down either a minimum deposit of £5,000 or 2% of the total mortgage, whichever is higher. If your deposit is more than £5,000, you will need to prove where you got the money from – and that’s the biggest catch of this mortgage deal.
That’s because Newcastle Building Society’s First Step Mortgage is only for those without ‘bank of Mum and Dad’. Your parents cannot give you the deposit amount to qualify for the mortgage.
Other First Time Buyer Mortgage Deals
Yorkshire Building Society £5,000 Deposit
Yorkshire Building Society has a great deal, with a £5,000 deposit for first time buyers. The maximum loan to value is a huge 99% – which means if you have £5,000 saved up you could get a mortgage up to £495,000. The lending criteria is strict and you’ll need to have an excellent credit score to boost your chances of acceptance. You can buy with another person who is not a first time buyer, but they can’t currently own property.
Halifax 5% Deposit
Halifax offer a similar 5% deposit scheme for first time buyers, which does allow new builds but not new build flats. You also cannot take advantage of other buying schemes such as Shared Ownership, Right to Buy, Shared Equity, or Buy to Let. It’s a repayment mortgage (not interest-only), and you can borrow up to £570,000 with a deposit between 5% – 10% under the Government mortgage guarantee scheme. This scheme is set to end on 30th June 2025, so you will need to apply before then.
Halifax Family Boost First Time Buyer Mortgage
What’s interesting about Halifax is that they also offer a ‘Family Boost‘ scheme which could be useful for those who have parents or grandparents with savings they are willing to hold in trust for three years. Ten per cent of the purchase price of the house is held in an account for three years, and if you keep up with your savings then your family receive their money – with interest – back.
Natwest 5% Deposit Mortgage
Natwest offer a 95% LTV first time buyer mortgage scheme as well, with a purchase price up to £600,000. Once again, it can’t be used on a new build home. The big restriction on this one is that you must borrow between 91% – 99% of the purchase price, whereas other schemes allow a lower LTV option if you have a bigger deposit and lower purchase price. Natwest’s 95% LTV mortgage, however, is open to those who are not classed as first time buyers – so anybody can apply for it (although you must be a home mover – you can’t use it to purchase a Buy to Let property).
A 100% Mortgage – Really?!
You can, in theory, apply for a mortgage which is 100% of the value of the property price. That means you don’t need a deposit at all.
Skipton Building Society’s Track Record 100% Mortgage deal is for first time buyers who don’t have a deposit. It uses your rental history to prove that you have reliably paid your rent on time every month. If you have previously owned property but not in the last three years, you can apply with a first time buyer. In fact, up to four people can be joint mortgage holders.
There are no completion fees, and your first five years is fixed, to help you budget. However, a 100% mortgage does open you up to possible problems such as negative equity and difficulty getting a mortgage in the future (when your five-year fixed term ends).
The Risk of Large Loan to Value Mortgages
The Government Mortgage Guarantee Scheme is designed to help first time buyers get on the property ladder. It was originally a temporary scheme to support first-time buyers and stimulate the property market, but was made permanent in July 2025. The idea is to help new buyers find properties in their desired area without needing a huge deposit. In theory, this should help more people become homeowners.
However, a high loan to value mortgage does put people at risk of tying themselves into both a property and a high mortgage rate for a very long time. Most mortgages are a minimum of 25 years, and the fixed term rate is for two, three, or five years depending on the provider and mortgage offer. This means that, after that fixed term, buyers will be at risk of high variable rates which could cost a lot more than the initial monthly payments. It will also be harder to shop around to remortgage after the fixed term, as lenders will be taking on a large risk of giving property owners a mortgage with little equity in their home.
With higher variable rates, long mortgage terms, and often high early repayment fees, any first time buyer considering a 5% deposit mortgage should take time to consider their long-term plans. If you want to move house again in, say, five years’ time, it might be better to save a larger deposit for another year or two and find a standard mortgage with a lower loan to value percentage instead of buying twice in a short space of time.
Negative Equity
Negative equity happens when your original mortgage outweighs the property price when you sell it (or look to remortgage). For example, if your original purchase price was £500,000 and you took a 98% mortgage, but then property prices drop so the home is worth £400,000, you owe more money on your mortgage than the property is worth. So, even if you sold the house, you would still owe money on your mortgage.
While property prices tend to trend upwards over time, this is a significant risk to consider. If you plan to stay in your new home for a long time, negative equity is generally considered less of a risk as property prices will trend upwards. But if you plan to move home in the next five years, you could be trapped by your mortgage if property prices dip.
Consider Larger Deposits
A larger deposit on a first time buyer mortgage can help mitigate risks like negative equity. It will also reduce the amount you need to borrow overall, and that means better interest rates and/or a shorter loan term. Both of these can save you tens of thousands of pounds over the lifetime of a mortgage, so it is important to do your sums. An independent mortgage advisor can help talk you through the best options for your personal circumstances.
Are Lifetime ISAs Useful?
It’s all gone a bit quiet on Lifetime ISAs, so we thought it was worth mentioning here that, if you already have one and made your first payment into it 12 months before you apply for a 5% mortgage, you can benefit from the high LTV scheme. This means that, in theory, you only need to save £4,000 in one year to get the £1,000 bonus and you’ll have your £5,000 deposit already saved.
However, it is always worth checking that the property you are interested in buying can be used with both a Lifetime ISA and is eligible for the 95% mortgage scheme you’re applying for, as there might be some restrictions that cancel each other out. (For example, if you hold an older Help to Buy ISA you might only be able to buy a new build home, which then means you can’t get a 95% mortgage under the Government scheme).
Not sure a first time buyer mortgage is for you? There are lots of other ways to buy a house – check out the rest of our mortgages and property section for ideas.
Tips to Get Your First Mortgage
There are things you can do while saving for your first house to improve your chances of getting a first time buyer mortgage.
- Save as large a deposit as possible
- Remember to save for moving costs such as solicitor and conveyancing fees, too
- Check your credit score and find ways to improve it
- Don’t make any credit applications at least six months before you apply for a mortgage
- Don’t miss any repayments on your credit cards or bills, or go into your overdraft
- Consider a credit builder service if you rent, to prove you can make regular payments reliably
- If you’re rejected for a mortgage application, STOP! Don’t make further applications for several months – one rejection will damage your credit score
- Consider other options like shared ownership, and look for key worker offers if you work in healthcare, education, the emergency services or the military
- Make sure properties you are looking at will be accepted by the mortgage provider under the terms of your mortgage
- Use an independent mortgage advisor – they are worth their fee and can find better deals that might not be available on the high street.
Disclaimer: MoneyMagpie is not a financial advisor or mortgage broker. Information provided in this article should not be taken as financial advice and individuals are recommended to seek expert independent financial advice before applying for a mortgage or any other financial product.
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