Buying your first home is one of the most exciting milestones in life—but it can also feel overwhelming, especially when it comes to arranging a mortgage. From understanding deposit requirements to navigating government schemes and completing the application process, there’s a lot to consider.

At Capital 8 Finance, I specialise in helping first time buyers across Scotland, England, and Wales secure the right mortgage for their first home. As a whole-of-market mortgage broker, I have access to every available lender and product, ensuring you get the best deal for your circumstances.

Whether you’re saving for your first deposit, exploring Help to Buy or Shared Ownership, or simply trying to understand how much you can borrow, I’ll guide you through every step of the process—so you can focus on finding your perfect first home.

We serve first time buyers across Scotland, England, and Wales, with access to:

• High street banks (Barclays, NatWest, Lloyds, Santander, TSB)
• Challenger banks (Aldermore, Accord, Virgin Money, Metro Bank)
• Building societies (Nationwide, Skipton, Leeds, Yorkshire, Coventry)
• Specialist lenders (for self-employed, contract workers, adverse credit, guarantor mortgages)

What is a First Time Buyer?

A first time buyer is someone who has never owned a property before (either in the UK or abroad). This includes:

• Anyone purchasing their first home
• Someone who has never owned a residential property

Why does first time buyer status matter?

• Lower stamp duty:First time buyers pay no stamp duty on properties up to £425,000 in England and Northern Ireland (Scotland and Wales have different thresholds)
• Access to government schemes:Help to Buy, Shared Ownership, and First Homes are only available to first time buyers
• Better mortgage rates:Some lenders offer exclusive first time buyer products with lower rates or cashback incentives
• Lower deposit requirements:Some lenders accept 5% deposits for first time buyers (vs. 10-15% for home movers)

How Much Can I Borrow?

Most lenders will lend 4.5 times your annual income (some lenders go up to 5-5.5 times for higher earners or specific professions like doctors, lawyers, and accountants).

Single Applicant Examples:

Annual Income	4.5x Income	Maximum Mortgage
£25,000	x 4.5	£112,500
£30,000	x 4.5	£135,000
£35,000	x 4.5	£157,500
£40,000	x 4.5	£180,000
£50,000	x 4.5	£225,000

Joint Application Examples:

Combined Income	4.5x Income	Maximum Mortgage
£50,000	x 4.5	£225,000
£60,000	x 4.5	£270,000
£70,000	x 4.5	£315,000
£80,000	x 4.5	£360,000

 

Important: These are maximum borrowing figures. Lenders will also assess your:

• Monthly outgoings(credit cards, loans, car finance, childcare costs)
• Credit history(any missed payments or defaults will reduce borrowing capacity)
• Deposit size(larger deposit = better rates and higher borrowing potential)

How Much Deposit Do I Need?

The minimum deposit for a first time buyer mortgage is typically 5% of the property price, but most lenders prefer at least 10%.

Deposit Examples:

Property Price	5% Deposit	10% Deposit	15% Deposit
£150,000	£7,500	£15,000	£22,500
£200,000	£10,000	£20,000	£30,000
£250,000	£12,500	£25,000	£37,500
£300,000	£15,000	£30,000	£45,000

 

Why a larger deposit is better:

• Lower interest rates:10% deposit mortgages have better rates than 5% deposit mortgages
• More lender choice:Not all lenders offer 5% deposit mortgages
• Lower monthly payments:Smaller loan = lower monthly cost
• Less interest paid:You’ll pay less interest over the life of the mortgage

Example:

• Property price:£200,000
• 5% deposit (£10,000):Borrow £190,000 at 5.5% = £1,181/month
• 10% deposit (£20,000):Borrow £180,000 at 4.8% = £1,036/month
• Monthly saving with 10% deposit:£145/month (£1,740/year)

Government Schemes for First Time Buyers

1. LIFT Scheme (2025) – Open Market Shared Equity (OMSE)

What is it?

The Low-cost Initiative for First Time Buyers (LIFT) is a Scottish Government shared equity scheme that helps you buy a home on the open market without funding the entire cost. The Scottish Government holds a share of the property (typically 10-40%), and you pay for the rest (typically 60-90%).

How it works:

• You choose a property to buy on the open market
• You pay for your share (typically 60-90% of the property price)
• The Scottish Government pays for the remaining share (typically 10-40%)
• You get complete titleto your home (your name is on the title deeds)
• The Scottish Government’s share is protected by a mortgage (standard security) on the property

Example:

• Property price: £200,000
• Your share: 75% (£150,000)
• Scottish Government share: 25% (£50,000)
• Your deposit (10% of your share): £15,000
• Mortgage needed: £135,000

Monthly costs:

• Mortgage payment: £777/month (£135,000 at 4.5% over 25 years)
• Total:£777/month (no rent on the government’s share)

Eligibility:

• First time buyer
• Low to medium household income (you must demonstrate you cannot afford to buy without help)
• Property price must be within the threshold for your area (thresholds vary across Scotland based on property size)
• Property must be your main residence (no subletting allowed)

Maximum price thresholds:

Thresholds vary across Scotland based on the number of habitable rooms in the property. For example:

• 1-bedroom property: typically £150,000-£180,000 (varies by area)
• 2-bedroom property: typically £180,000-£220,000 (varies by area)
• 3-bedroom property: typically £220,000-£260,000 (varies by area)

Check the Scottish Government website for the exact threshold in your area.

Increasing your share:

Once you own the home, you can buy a larger share of the property later if your financial situation improves.

• Minimum increase:5% per year
• Maximum:You can typically buy up to 100% (meaning the Scottish Government no longer has a share)
• Exception:Some properties have a “golden share” clause (typically 10%), meaning the Scottish Government keeps a 10% share permanently (usually in areas with fewer affordable homes)

Costs to increase your share:

• Valuation fees
• Legal fees
• Administration costs (charged by the organisation handling the transaction)

Selling your home:

When you sell, the proceeds are split based on your ownership share:

Example:

• Your share: 70%
• Scottish Government share: 30%
• Original purchase price: £200,000
• Sale price: £240,000
• You receive: 70% of £240,000 = £168,000
• Scottish Government receives: 30% of £240,000 = £72,000
• From your £168,000, you repay your mortgage lender
• You keep the profit(if any) after mortgage repayment

Property value appreciation: The value of your home is not affected by your share. If your home increases in value from £200,000 to £240,000, you benefit from the full appreciation on your percentage share.

Remortgaging:

If you want to remortgage your LIFT property:

• Contact the registered social landlord or local council who handled the original sale
• Provide a copy of your Ranking Agreement
• You’ll be responsible for all costs (lender fees, legal fees, administration fees)

Key advantages:

✅ Lower deposit required (typically 10% of your share, not the full property)

✅ No rent on the Scottish Government’s share (unlike Shared Ownership)

✅ Complete ownership and title to your home

✅ Can increase your share over time

✅ Benefit from property price appreciation

✅ Access to whole-of-market mortgage lenders for your portion

Key disadvantages:

❌ Limited to properties within Scottish Government price thresholds

❌ Must prove you cannot afford to buy without help

❌ Cannot sublet or rent out the property

❌ Scottish Government has a legal charge on the property

❌ Costs to increase your share (valuation, legal, administration fees)

❌ Some properties have a “golden share” (10% government share permanently)

Why choose LIFT over a standard mortgage?

• Smaller deposit:10% of your share (not 10% of the full property price)
• Lower mortgage needed:You only borrow for your share, not the full property
• Lower monthly payments:Smaller mortgage = lower monthly cost
• Government support:The Scottish Government is invested in your success

Example comparison:

• Property price: £200,000
• Standard mortgage (10% deposit):Deposit £20,000, Mortgage £180,000
• LIFT scheme (75% share, 10% deposit):Deposit £15,000, Mortgage £135,000
• Monthly saving with LIFT:Approximately £260/month

How to apply:

1. Check if the property is within the LIFT threshold for your area
2. Contact the administering organisation (Link Homes or your local council)
3. Complete an application form
4. Provide proof of income and financial circumstances
5. If approved, proceed with your purchase through a solicitor

More information: Visit HERE

2. Shared Ownership (England Only)

What is it? You buy a share of a property (25-75%) and pay rent on the remaining share owned by a housing association. You can buy more shares over time (called “staircasing”).

How it works:

• You buy: 25-75% of the property
• Housing association owns: 25-75% of the property
• You pay: Mortgage on your share + rent on the housing association’s share

Example:

• Property value: £200,000
• You buy: 50% share (£100,000)
• Your deposit: £10,000 (10% of your share)
• Mortgage: £90,000
• Rent on remaining 50%: £250/month (typically 2.75% of the housing association’s share)

Monthly costs:

• Mortgage payment: £518/month (£90,000 at 4.5% over 25 years)
• Rent: £250/month
• Total:£768/month

Staircasing: You can buy additional shares (10%, 25%, or more) over time until you own 100% of the property.

Eligibility:

• First time buyer (or previous homeowner who can’t afford to buy now)
• Household income under £80,000 (£90,000 in London)
• Property must be your main residence

3. First Homes Scheme (England Only)

What is it? New build homes sold at a 30-50% discount to first time buyers and key workers.

How it works:

• Property is sold at 30-50% below market value
• Discount is locked in forever (when you sell, the next buyer also gets the discount)
• You need a standard mortgage (no equity loan or shared ownership)

Example:

• Market value: £250,000
• First Homes discount: 30% (£75,000)
• Purchase price:£175,000
• Your deposit (10%): £17,500
• Mortgage: £157,500

Eligibility:

• First time buyer or previous homeowner who can’t afford to buy now
• Household income under £80,000 (£90,000 in London)
• Must be your main residence for at least 5 years

4. Lifetime ISA (UK-Wide)

What is it? A savings account where the government adds a 25% bonus to your savings (up to £1,000/year) to help you buy your first home.

How it works:

• You save: Up to £4,000/year
• Government adds: 25% bonus (up to £1,000/year)
• Maximum bonus: £33,000 (if you save the maximum for 33 years)

Example:

• You save £4,000/year for 3 years = £12,000
• Government bonus: £3,000
• Total:£15,000

Eligibility:

• Aged 18-39 (can only open a Lifetime ISA before age 40)
• First time buyer
• Property price up to £450,000
• Must use funds for a first home purchase or retirement (age 60+)

⚠️ Withdrawal penalty: If you withdraw funds for any reason other than buying your first home or retirement, you’ll pay a 25% penalty (losing your government bonus and some of your own savings).

First Time Buyer Mortgage Process

Step 1: Check Your Credit Score

Your credit score affects:

• Whether you’ll be approved(lenders reject applicants with poor credit)
• Interest rates(better credit = lower rates)
• Deposit requirements(poor credit may require 15-25% deposit)

How to check your credit score:

Click on the link below for a free credit report and trial with Checkmyfile. Try it for free for 30 days, then it is £14.99 a month – cancel online any time.

CLICK HERE

What lenders look for:

• No missed payments in the last 12 months
• No defaults, CCJs, or bankruptcies in the last 6 years
• Credit utilisation below 30% (e.g., if you have a £3,000 credit card limit, keep balance below £900)
• Electoral roll registration (proves your address)

How to improve your credit score:

• Register on the electoral roll at your current address
• Pay all bills on time for at least 6 months
• Pay down credit card balances below 30% of the limit
• Close unused credit accounts (too much available credit can be a red flag)
• Avoid applying for new credit in the 3-6 months before applying for a mortgage

Step 2: Save Your Deposit

Tips for saving faster:

• Open a Lifetime ISA (get 25% government bonus)
• Set up a standing order on payday (save before you spend)
• Use a high-interest savings account (compare rates on MoneySavingExpert)
• Cut unnecessary subscriptions (streaming services, gym memberships you don’t use)
• Consider living with parents or house-sharing to reduce rent costs

Gifted deposits: Most lenders accept gifted deposits from:

• Parents or grandparents
• Siblings
• Aunts/uncles

Requirements:

• Must be a genuine gift (not a loan to be repaid)
• Donor must sign a gifted deposit letter confirming they have no legal interest in the property
• Some lenders require proof of where the donor’s funds came from (to comply with anti-money laundering rules)

Step 3: Get a Decision in Principle (DIP)

A Decision in Principle (also called Agreement in Principle or Mortgage in Principle) is a conditional approval from a lender confirming how much they’ll lend you.

Why you need a DIP:

• Estate agents and sellers take you seriously (proves you can afford the property)
• Speeds up the buying process (you’re already pre-approved)
• Helps you set a realistic budget (you know your maximum borrowing)

How to get a DIP:

• Contact me and I’ll arrange a DIP with the most suitable lender
• Soft credit check (no impact on credit score)
• Valid for 60-90 days (depending on lender)

What you’ll need:

• Proof of income (payslips, tax returns if self-employed)
• Proof of deposit (bank statements showing savings)
• ID and proof of address
• Details of any credit commitments (loans, credit cards, car finance)

Step 4: Find Your Property

Tips for first time buyers:

• Set a realistic budget (remember to factor in stamp duty, legal fees, survey costs, and moving costs)
• Consider up-and-coming areas (better value, potential for price growth)
• Don’t stretch your budget to the maximum (leave room for unexpected costs and interest rate rises)
• Get a survey (don’t rely on the lender’s valuation—it’s not a structural survey)

What to look for:

• Good transport links (especially if you commute)
• Local amenities (shops, schools, parks)
• Neighbourhood safety (check crime statistics on police.uk)
• Future development plans (check local council planning applications)

Step 5: Make an Offer

How much to offer:

• Check recent sold prices on Rightmove or Zoopla (look for “sold prices” in the area)
• Consider the property’s condition (factor in renovation costs)
• In Scotland, offers are typically above the asking price (due to the sealed bid system)
• In England and Wales, offers are often below asking price (room for negotiation)

Scotland vs. England/Wales:

• Scotland:Offers are legally binding once accepted (you can’t pull out without penalty)
• England/Wales:Offers are not legally binding until contracts are exchanged (either party can pull out)

Step 6: Full Mortgage Application

Once your offer is accepted, I’ll submit your full mortgage application with:

• Proof of income (last 3 months’ payslips, last 2-3 years’ accounts if self-employed)
• Proof of deposit (bank statements showing your savings)
• Bank statements (last 3-6 months)
• ID and proof of address
• Details of the property (address, purchase price, estate agent details)

Timeline:

• Application submitted: Day 1
• Lender reviews application: Days 1-7
• Valuation arranged: Days 7-14
• Mortgage offer issued: Days 14-28 (can be faster for straightforward cases)

Step 7: Property Valuation & Survey

Lender’s valuation:

• Arranged by the lender (you pay £0-£500 depending on property value)
• Confirms the property is worth the purchase price
• Not a structural survey(only checks the property is adequate security for the loan)

Homebuyer’s survey (optional but recommended):

• RICS Home Survey Level 2(£400-£600): Highlights major defects and urgent repairs
• RICS Home Survey Level 3(£600-£1,500): Full structural survey (recommended for older properties or properties in poor condition)

Why you should get a survey:

• Identifies hidden problems (damp, subsidence, roof issues, electrical problems)
• Gives you negotiating power (you can renegotiate the price or ask the seller to fix issues)
• Avoids costly surprises after you move in

Step 8: Mortgage Offer & Legal Work

Mortgage offer:

• Lender issues formal mortgage offer (valid for 6 months)
• Sent to you and your solicitor
• You can now proceed to exchange contracts (England/Wales) or conclude missives (Scotland)

Legal work (conveyancing):

• Your solicitor will:
  • Conduct property searches (local authority, environmental, drainage)
  • Review the title deeds
  • Check for any legal issues (rights of way, restrictive covenants, boundary disputes)
  • Exchange contracts (England/Wales) or conclude missives (Scotland)
  • Transfer funds on completion day

Timeline:

• Legal work: 4-8 weeks (can be faster for leasehold flats or slower for complex freehold properties)

Step 9: Exchange & Completion

England & Wales:

• Exchange of contracts:You pay a deposit (typically 10% of purchase price) and the sale becomes legally binding
• Completion:Usually 1-4 weeks after exchange. Funds are transferred, you get the keys, and you can move in

Scotland:

• Conclusion of missives:Sale becomes legally binding (no separate exchange and completion)
• Settlement date:Agreed date when funds are transferred and you get the keys (typically 4-8 weeks after offer accepted)

First Time Buyer Mortgage Costs

1. Deposit

• Amount:5-15% of property price (typically £7,500-£30,000 for a £150,000-£200,000 property)

2. Mortgage Arrangement Fee

• Cost:£0-£2,000 (typically £999)
• Options:Pay upfront or add to mortgage (adds interest over time)

3. Valuation Fee

• Cost:£0-£500 (depending on property value)
• Note:Some lenders offer free valuations for first time buyers

4. Survey Cost (Optional but Recommended)

• RICS Level 2:£400-£600
• RICS Level 3:£600-£1,500

5. Legal Fees (Conveyancing)

• Cost:£800-£1,500 (Scotland typically £800-£1,200, England/Wales £1,000-£1,500)
• Includes:Property searches, title checks, Land Registry fees

6. Stamp Duty (England & Northern Ireland)

• First time buyers:No stamp duty on properties up to £425,000
• Properties £425,001-£625,000:5% on the portion above £425,000

Example:

• Property price: £500,000
• Stamp duty: 5% on £75,000 (£500,000 – £425,000) = £3,750

7. Land and Buildings Transaction Tax (Scotland)

• First time buyers:No LBTT on properties up to £175,000
• Relief available:Up to £600,000 (reduced rates for first time buyers)

Example:

• Property price: £200,000
• LBTT: 2% on £25,000 (£200,000 – £175,000) = £500

8. Land Transaction Tax (Wales)

• First time buyers:No LTT on properties up to £225,000

9. Broker Fee

• My fee:£995
• Payable:On completion only (no upfront fees)

Total Typical First Time Buyer Costs:

Example: £200,000 property, 10% deposit (£20,000), £180,000 mortgage

Cost	Amount
Deposit	£20,000
Lender arrangement fee	£999
Valuation	£300
Survey (Level 2)	£500
Legal fees	£1,000
Stamp duty/LBTT	£0-£500
Broker fee	£995
Total	£23,794-£24,294

 

Budget for: £25,000-£30,000 total (including deposit and all fees)

First Time Buyer FAQs

Can I get a mortgage with a 5% deposit?

Yes, but:

• Higher interest rates(5% deposit mortgages have rates 0.5-1% higher than 10% deposit mortgages)
• Limited lender choice(not all lenders offer 5% deposit mortgages)
• Stricter affordability checks(lenders are more cautious with high LTV mortgages)

Recommendation: If possible, save a 10% deposit for better rates and more lender options.

Can I get a mortgage if I’m self-employed?

Yes. Lenders typically require:

• 2 years’ accounts or tax returns(SA302s and tax year overviews)
• Proof of ongoing contracts(if you’re a contractor)
• Business bank statements(last 3-6 months)

Some lenders accept 1 year’s accounts for established businesses or contractors with a strong track record.

Tip: Speak to a broker (me!) who knows which lenders are self-employed friendly.

Can I get a mortgage with bad credit?

Possibly, but:

• Higher interest rates(+0.5-3% depending on severity)
• Larger deposit required(15-25% instead of 5-10%)
• Limited lender choice(specialist lenders only)

What counts as bad credit:

• Missed payments (credit cards, loans, phone bills)
• Defaults or CCJs
• Bankruptcy or IVA
• Payday loans (even if repaid on time, some lenders view them negatively)

How to improve your chances:

• Wait 12 months after any missed payments
• Pay down credit card balances
• Register on the electoral roll
• Save a largerdeposit (15%+)

Can I buy with a friend or family member?

Yes. You can apply for a joint mortgage with:

• Partner or spouse
• Friend
• Sibling
• Parent

Important:

• All applicants’ incomes are combined (increases borrowing capacity)
• All applicants are jointly liable for the mortgage (if one person can’t pay, the others must cover it)
• All applicants’ credit histories are checked (one person’s bad credit can affect approval)
• All applicants are legal owners of the property (you’ll need a declaration of trust to specify ownership shares if not 50/50)

What if I can’t afford a mortgage on my own?

Options:

1. Guarantor mortgage:

• A family member (usually a parent) guarantees your mortgage payments
• If you can’t pay, the guarantor is liable
• Allows you to borrow more or get approved with a smaller deposit

2. Joint Borrower Sole Proprietor (JBSP) mortgage:

• A family member is on the mortgage but not on the property title
• Helps you borrow more (their income is included in affordability)
• They’re liable for payments but don’t own any of the property
• Useful if a parent wants to help you buy without triggering stamp duty on a second property

3. Family offset mortgage:

• Family member deposits savings into a linked account (typically 10-25% of property value)
• Their savings offset your mortgage interest (you pay less interest)
• They can’t access their savings until you’ve paid down the mortgage or remortgage
• They keep ownership of their savings (not a gift)

Should I use a mortgage broker or go direct to a lender?

Benefits of using a broker (me!):

• Whole-of-market access(I can search every lender, not just one)
• Expert advice(I know which lenders accept your circumstances—self-employed, bad credit, small deposit, etc.)
• Save time(I do the research, paperwork, and lender communication for you)
• Better approval chances(I’ll only submit your application to lenders likely to approve you—avoiding multiple rejections that damage your credit score)

Going direct to a lender:

• You only see that lender’s products (you might miss better deals elsewhere)
• You do all the research and paperwork yourself
• If you’re rejected, it damages your credit score (making it harder to get approved elsewhere)

My recommendation: Use a broker for your first mortgage. Once you’re more experienced and have a strong credit history, you can compare direct deals vs. broker deals for future remortgages.

Why Choose Capital 8 Finance for Your First Mortgage?

Whole-of-Market Access

I have access to:

• High street banks (Barclays, NatWest, Lloyds, Santander, TSB)
• Challenger banks (Aldermore, Accord, Virgin Money)
• Building societies (Nationwide, Skipton, Leeds, Yorkshire, Coventry)
• Specialist lenders (for self-employed, contract workers, adverse credit, guarantor mortgages)

This is only a selection of lenders available to me.

First Time Buyer Specialists

I understand that buying your first home is a big step, and I’ll guide you through:

• How much you can borrow
• How much deposit you need
• Which government schemes you’re eligible for
• How to improve your credit score
• What all the costs are (no hidden surprises)
• The entire application process from DIP to completion

Transparent Pricing

• Broker fee:£995
• Payable on completion only(no upfront fees)
• No obligation consultation– I’ll review your circumstances and explain your options with no pressure to proceed

Get Expert First Time Buyer Mortgage Advice

Whether you’re just starting to save or you’re ready to make an offer, I offer:

✅ Free initial consultation to assess your borrowing capacity

✅ Whole-of-market access to find the best first time buyer mortgage deals

✅ Expert guidance on government schemes, deposits, and affordability

✅ Transparent pricing (1% broker fee, payable on completion only)

Serving first time buyers across Scotland, England, and Wales.

Capital 8 Finance – Expert mortgage advice to help you buy your first home with confidence.

Low-cost Initiative for First Time Buyers (LIFT)

If you would like to view the government’s Low-cost Initiative for First Time Buyers (LIFT), you can learn more on the official government website by clicking here.