Last Updated On – 10-09-2026
As of now, indicative lowest fixed rates available to first-time buyers were around 4.97% at 95% LTV, 4.85% at 90% LTV and 4.78% at 85% LTV for two-year fixes.
Five-year fixed rates were around 4.98%, 4.82% and 4.77% respectively. These figures are market indicators rather than guaranteed rates for every applicant.
A larger deposit can usually give buyers access to a wider choice of mortgages and potentially lower rates. However, the mortgage with the lowest interest rate is not automatically the cheapest once arrangement fees, incentives and other costs are included.
Last Updated: 10.09.2026
Best Mortgage Rates For First Time Buyers
First-time buyers generally have access to fixed-rate, tracker and other variable-rate mortgages. Fixed deals remain popular because repayments remain predictable during the initial fixed period.
Current indicative first-time buyer fixed rates show how deposit size can affect pricing:
| Deposit | LTV | 2-Year Fixed Rate | 5-Year Fixed Rate |
| 5% | 95% | 4.97% | 4.98% |
| 10% | 90% | 4.85% | 4.82% |
| 15% | 85% | 4.78% | 4.77% |
Rates shown are indicative market rates recorded on 9 September 2026 and can change at short notice.
The table highlights why buyers should compare mortgages according to their LTV rather than looking only for the lowest rate advertised across the entire mortgage market.
How Much Deposit Do First-Time Buyers Need?
Many first-time buyers start with a deposit of between 5% and 10% of the property’s value. Larger deposits can reduce the amount borrowed and may unlock cheaper mortgage products.
For a £250,000 property:
| Deposit | Deposit Amount | Mortgage Required | LTV |
| 5% | £12,500 | £237,500 | 95% |
| 10% | £25,000 | £225,000 | 90% |
| 15% | £37,500 | £212,500 | 85% |
| 25% | £62,500 | £187,500 | 75% |
Loan-to-value is simply the mortgage as a percentage of the property’s value. Lower LTV mortgages typically present less risk to lenders and can therefore qualify for better pricing.
A buyer close to the next LTV threshold should compare whether saving a little longer could produce a worthwhile reduction in mortgage costs.
Can First-Time Buyers Get A 100% Mortgage?
Yes. Some UK lenders currently offer mortgages that can allow eligible buyers to borrow up to 100% of a property’s value.
These products are considerably more restricted than conventional 90% or 95% mortgages. Eligibility might depend on a strong record of paying rent, credit history, income or support from family members.
For example, some current renter-focused products allow eligible borrowers to apply without providing a traditional deposit.
A 100% mortgage can help someone who can afford monthly repayments but struggles to build a deposit. However, borrowing the full property value can increase the risk of negative equity if house prices fall.
What Is The Cheapest Mortgage For A First-Time Buyer?
The mortgage with the lowest advertised rate is not necessarily the cheapest.
Suppose one mortgage offers a slightly lower interest rate but charges a £999 product fee, while another offers a marginally higher rate without an arrangement fee. For a smaller mortgage or short fixed period, the fee-free product could cost less overall.
First-time buyers should compare:
- Initial Interest Rate: The rate charged during the introductory deal
- Product Fee: Arrangement fees can reach hundreds or more than £1,000
- APRC: Gives a broader indication of borrowing costs over the mortgage term
- Cashback: Some lenders offer incentives towards buying costs
- Valuation Costs: These may be included with some mortgage products
- Early Repayment Charges: Important if you may move or repay early
- Overpayment Allowance: Useful if you expect to make additional repayments
- Follow-On Rate: The rate applying after the introductory deal ends
Total cost over the period you expect to keep the mortgage is often a better comparison than headline interest rate alone.
How Much Will A First-Time Buyer Mortgage Cost Each Month?
Monthly repayments depend on the amount borrowed, interest rate and mortgage term.
Using an illustrative 5% interest rate, approximate capital-and-interest repayments would be:
| Mortgage | 25 Years | 30 Years | 35 Years |
| £200,000 | £1,169 | £1,074 | £1,009 |
| £225,000 | £1,315 | £1,208 | £1,136 |
| £250,000 | £1,461 | £1,342 | £1,262 |
Extending the mortgage term reduces the monthly repayment, but it normally means paying interest for longer and therefore increasing the total cost of borrowing.
First-time buyers should choose a repayment level that remains manageable alongside Council Tax, insurance, utilities, maintenance and other household costs.
Should First-Time Buyers Choose A 2-Year Or 5-Year Fixed Mortgage?
There is no universally better option.
A two-year fix provides a shorter commitment. If mortgage rates subsequently fall, the borrower gets an earlier opportunity to switch deals. However, they also face refinancing sooner and could incur another product fee.
A five-year fix provides longer payment certainty and reduces short-term refinancing risk. The downside is that borrowers may remain tied to their deal if significantly cheaper mortgages appear.
Early repayment charges should also be considered, particularly if there is a realistic possibility of moving home during the fixed period.
Tracker mortgages provide another option. Their interest rate usually moves with Bank Rate, meaning repayments can rise as well as fall.
How Have Mortgage Rates Changed Over The Years?
Mortgage rates have changed dramatically since the beginning of the decade.
The extremely low-rate environment of 2020 and 2021 was followed by rapid monetary tightening as inflation increased. Bank Rate provides a useful backdrop for understanding these movements, although fixed mortgage rates do not move exactly in line with it.
| Period | Bank Rate Position | Mortgage Market Direction |
| 2020 | Fell to 0.10% | Exceptionally low borrowing rates |
| 2021 | 0.10% for most of the year | Very competitive mortgage pricing |
| 2022 | Rose from 0.25% to 3.50% | Mortgage rates increased sharply |
| 2023 | Reached 5.25% | Mortgage affordability became much tighter |
| 2024 | Fell from 5.25% to 4.75% | Fixed rates began easing from previous peaks |
| 2025 | Fell through several steps to 3.75% | Mortgage pricing generally improved |
| 2026 | 3.75% as of 10 September | Rates remain well above the ultra-low 2020–21 era |
Bank Rate reached 5.25% in August 2023, fell to 5% in August 2024, 4.75% in November 2024 and then declined through 2025, reaching 3.75% in December 2025. It remains at 3.75% as of 10 September 2026.
This does not mean mortgage rates have followed exactly the same path. Fixed mortgage pricing is also affected by financial-market expectations, funding costs, swap rates, competition between lenders and the perceived risk associated with individual borrowers.
The Bank of England’s next monetary policy decision is scheduled for 17 September 2026, meaning mortgage pricing could continue changing as markets react to inflation and interest-rate expectations.
How Much Can A First-Time Buyer Borrow?
Mortgage affordability is not determined by salary alone.
As a broad starting point, borrowing is often capped around 4.5 times annual household income, although lenders have different criteria and some applicants may qualify for more or less.
| Household Income | 4× Income | 4.5× Income | 5× Income |
| £35,000 | £140,000 | £157,500 | £175,000 |
| £50,000 | £200,000 | £225,000 | £250,000 |
| £65,000 | £260,000 | £292,500 | £325,000 |
| £80,000 | £320,000 | £360,000 | £400,000 |
These figures are illustrative rather than guaranteed borrowing limits.
Lenders also assess regular expenditure, loans, credit cards, dependants, employment stability and other financial commitments before deciding how much they are prepared to lend.
Who Counts As A First-Time Buyer?
A first-time buyer is generally someone who has never previously owned an interest in residential property.
Ownership of a residential property elsewhere in the world can matter, not just property previously owned in the UK. For First-Time Buyers’ SDLT Relief, everyone purchasing jointly must meet the qualifying conditions.
This means someone buying with a partner who has previously owned residential property may not qualify for certain first-time buyer tax advantages, even if the other applicant has never owned a home.
First-Time Buyer Schemes And Support In 2026
First-time buyers should make sure they are looking at current schemes rather than outdated Help to Buy information.
The permanent Mortgage Guarantee Scheme, introduced in July 2025, supports the availability of mortgages between 91% and 95% LTV and can help eligible buyers purchase with a deposit as small as 5%.
The First Homes scheme operates in England and can offer qualifying first-time buyers homes at discounts of 30% to 50% below market value. Income, property-price and mortgage requirements apply.
A Lifetime ISA can also help eligible buyers build a deposit. Savers can contribute up to £4,000 each tax year and receive a 25% Government bonus, worth up to £1,000 annually.
To use the money without a withdrawal charge for a first home, qualifying conditions include a property price of no more than £450,000 and having made the first LISA payment at least 12 months earlier.
Shared Ownership remains another route, allowing eligible buyers to purchase a percentage of a property and pay rent on the remaining share.
The Help to Buy ISA is closed to new applicants, although existing account holders can continue contributing until November 2029 and claim qualifying bonuses until November 2030.
First-Time Buyer Stamp Duty And Property Taxes
Property taxes differ depending on where the home is located.
In England and Northern Ireland, qualifying first-time buyers purchasing for £500,000 or less currently pay no SDLT on the first £300,000 and 5% on the portion between £300,001 and £500,000. Properties costing more than £500,000 do not qualify for First-Time Buyers’ Relief.
In Scotland, first-time buyer LBTT relief increases the nil-rate threshold from £145,000 to £175,000, potentially reducing the tax bill by up to £600.
In Wales, there is currently no specific Land Transaction Tax relief for first-time buyers.
Understanding these differences is particularly important when comparing the true upfront cost of buying in different parts of the UK.
Which First-Time Buyers May Find It Harder To Get The Best Rates?
The lowest advertised mortgage rates are generally reserved for applicants who meet the lender’s strongest affordability and risk criteria.
Applicants who may have fewer options include self-employed workers with limited trading history, people with significant existing debts, buyers with adverse credit histories and applicants whose income varies substantially.
That does not automatically mean they cannot obtain a mortgage. Different lenders assess risk differently, which is one reason comparing the wider market can be particularly valuable for applicants with less straightforward circumstances.
How Credit Scores Affect First-Time Buyer Mortgage Rates?
There is no single universal credit score required to obtain a mortgage.
Lenders review information from credit reference agencies alongside income, expenditure, outstanding debt and previous borrowing behaviour.
Before applying, buyers can strengthen their position by checking their credit reports for errors, making repayments on time, reducing expensive debts where practical and avoiding unnecessary new credit applications shortly before applying for a mortgage.
A weaker credit history may restrict the available lenders or result in higher rates.
How To Compare First-Time Buyer Mortgage Deals?
Start with mortgages available at your deposit level rather than comparing every headline rate on the market.
Then compare the initial rate, product fee, monthly repayment, incentives, early repayment charges and total cost during the introductory period.
A mortgage broker may be useful where circumstances are complicated or when a buyer wants access to products from a broader selection of lenders.
Buyers can also approach banks and building societies directly, and some products may only be available through particular distribution channels.
How To Apply For A First-Time Buyer Mortgage?
A typical purchase starts by assessing affordability and obtaining an Agreement in Principle. This provides an indication of how much a lender might be prepared to offer but is not a final mortgage approval.
Once a property has been found and an offer accepted, the buyer submits a full mortgage application. The lender then assesses income, expenditure, credit history and the property being purchased.
Documents commonly required include proof of identity, proof of address, bank statements, payslips or evidence of self-employed income and details explaining the source of the deposit.
If the application and property satisfy the lender’s requirements, a formal mortgage offer can be issued before conveyancing progresses towards exchange and completion.
What Could Happen To First-Time Buyer Mortgage Rates?
The Bank of England held Bank Rate at 3.75% in July 2026, with its next decision scheduled for 17 September.
However, predicting mortgage rates solely from expected Bank Rate movements can be misleading.
Fixed-rate mortgage pricing can respond to changes in market expectations before the Bank of England actually changes its policy rate. Inflation, economic growth, government borrowing expectations, wholesale funding costs and competition between mortgage lenders can all affect pricing.
For first-time buyers, the practical approach is therefore to compare available mortgages based on today’s affordability rather than relying on predictions that rates will definitely rise or fall.
Conclusion
Finding the best mortgage rates for first time buyers means looking beyond the lowest advertised percentage.
Deposit size can have a major effect on available rates, particularly around important LTV thresholds such as 95%, 90% and 85%. Buyers should also compare arrangement fees, mortgage terms, early repayment charges, incentives and overall borrowing costs.
Government-backed schemes, Lifetime ISAs and first-time buyer tax relief may also reduce some of the barriers to buying.
Most importantly, choose a mortgage that remains affordable within your wider household budget. A slightly cheaper headline rate is of little benefit if the overall mortgage does not suit your finances or future plans.
FAQs
What Is A Good Mortgage Rate For A First-Time Buyer?
It depends on your deposit, LTV and personal circumstances. As of 9 September 2026, indicative lowest first-time buyer fixed rates at 85% to 95% LTV were broadly in the high-4% range.
Can I Get A First-Time Buyer Mortgage With A 5% Deposit?
Yes. 95% LTV mortgages allow eligible buyers to purchase with a 5% deposit, although affordability and credit checks still apply.
Is A 10% Deposit Better Than A 5% Deposit?
A 10% deposit reduces the mortgage to 90% LTV and can provide access to a wider selection of products and potentially lower rates than a 95% mortgage.
Can First-Time Buyers Get A 100% Mortgage?
Yes, selected lenders offer 100% mortgage options. Eligibility is usually more restrictive, and borrowing without a deposit increases the risk of negative equity.
How Much Can I Borrow As A First-Time Buyer?
Around 4.5 times household income is a common broad benchmark, but actual borrowing depends on the lender’s affordability assessment, expenditure, debts and circumstances.
Is A 2-Year Or 5-Year Mortgage Better For First-Time Buyers?
A two-year fix offers greater short-term flexibility, while a five-year fix provides longer payment certainty. The better choice depends on your future plans and attitude towards interest-rate risk.
Do First-Time Buyers Get Better Mortgage Rates?
Not automatically. Mortgage rates are mainly influenced by factors such as deposit size, LTV, affordability, credit history and lender criteria rather than first-time buyer status alone.
