For many, buying their first home is a significant life milestone. However, with house prices rising and mortgage eligibility criteria becoming tighter, understanding how to secure a mortgage as a first-time buyer in 2025 is more crucial than ever. While the process may seem overwhelming, the proper knowledge and preparation can make all the difference. Here’s everything you need to know to take those crucial first steps onto the property ladder.
What Is a Mortgage and How Does It Work?
Before you begin saving or contacting lenders, it’s vital to understand how mortgages work. A mortgage is a long-term loan from a bank or building society that enables you to purchase a property. As a first-time buyer, you will usually need to provide a deposit, typically at least 5% of the property’s value. The lender covers the rest, and you repay the loan monthly over a set term, usually 25 to 30 years, including interest.
Your monthly repayment amount depends on your interest rate, the loan amount, and the term. It is crucial to keep up with repayments, as missed payments could result in your home being repossessed.
Sourcing a Mortgage
When sourcing a mortgage, you have several routes to explore. You can apply directly with a bank or building society, which may offer exclusive deals for existing customers. Alternatively, many first-time buyers choose to search online using comparison websites that list a wide range of lenders, interest rates, and terms in one place. Another effective option is to go through a mortgage broker, who can access deals not available to the public and provide personalised advice based on your financial circumstances. Each method has its benefits, so it’s worth researching all three to find the most suitable mortgage for your needs.
Saving for Your Deposit the Smart Way
A key part of getting a mortgage as a first-time buyer is saving enough for your deposit. This can feel like a mountain to climb, especially if you’re renting or managing bills on a tight income. Start by reviewing your savings options and opening a suitable savings account.
Consider a Lifetime ISA, which allows you to save up to £4,000 each year towards your first home. The government adds a 25% bonus to your savings – up to £1,000 per year – which can significantly boost your deposit fund.
It’s also wise to reduce or clear any outstanding debts. High levels of personal debt can impact your mortgage application, so aim to repay credit cards and loans while saving. Budgeting apps and tools can help you track your spending and grow your savings more efficiently.
Understand and Improve Your Credit Score
Your credit report is one of the most critical factors in your mortgage application. Lenders assess your credit history to decide whether you’re a trustworthy borrower.
Start by checking your credit report using free services, such as Experian, Equifax, or TransUnion. Make sure the information is accurate. Improve your score by:
- Registering on the electoral roll
- Paying bills on time
- Avoiding new debt or buy now, pay later schemes
- Keeping your credit utilisation low
Give yourself at least six months of consistent financial behaviour before applying – it will make a difference.
Get Mortgage Advice Tailored to Your Situation
If your finances are straightforward, you might feel confident applying directly with a bank or building society. However, if you’re self-employed, have a patchy financial history, or are unsure what mortgage is right for you, it’s best to speak with a mortgage advisor.
An independent mortgage advisor can help you find the best deals, explain your options, and guide you through the process. They’ll also help ensure your paperwork is correct and complete, improving your chances of approval.
Don’t Overlook the Extra Costs
When learning how to get a mortgage as a first-time buyer, many people focus only on the deposit. However, there are several other upfront costs to factor into your savings plan:
- Solicitor and conveyancing fees
- Stamp Duty Land Tax (though first-time buyers pay none on homes under £425,000)
- Property searches and surveys
- Mortgage arrangement fees
Additionally, you may need funds to furnish and decorate your new home. A general home inspection is also recommended. Professionals use specialised tools, such as professional radon testing equipment, to detect unseen risks for home inspectors. These inspections can uncover hidden problems, saving you future costs and stress.
Aim to over-save where possible. A financial buffer will give you more peace of mind and flexibility when the time comes to complete your purchase.
Insurance: A Vital Part of Homeownership
Although not always legally required, insurance is often a condition of your mortgage offer. Most lenders will require home insurance to protect the property, which is considered an asset, until your loan is repaid.
Some lenders may also require life insurance. Even if not mandatory, it’s a good idea to consider a policy to ensure your mortgage can be covered if something happens to you. This is especially important if you’re buying a home with a partner who might struggle to manage repayments alone.
The life insurance broker Reassured allows you to compare mortgage life insurance quotes free of charge. You can also explore options like Bequest, which offers flexible life cover and will-writing services tailored for homeowners.
Shop around to find a policy that offers the right cover and competitive premiums. Don’t forget to include contents insurance to protect your belongings as well.
The Rise of 2025 Mortgage Trends: What’s New?
In 2025, several new developments are shaping how first-time buyers approach mortgages:
- Green mortgages are becoming more popular. These offer lower interest rates or cashback if you buy an energy-efficient home.
- AI-based mortgage applications are reducing approval times but still require solid financial credentials.
- Mortgage guarantee schemes backed by the government are available to help buyers with smaller deposits access the market.
- Flexible mortgages offer features like payment holidays or overpayment allowances, giving you more control over repayments.
Staying up to date with the latest products and schemes can help you find the best solution for your situation.
Stay Organised and Keep Planning
Securing your mortgage is just the beginning. Once you move in, continue the budgeting habits that helped you save. Establish a contingency fund for unexpected expenses, such as boiler repairs, appliance replacements, or rising interest rates. Consider setting up standing orders to transfer money into your savings account automatically each month.
Owning a home is a long-term responsibility, and innovative financial planning is
