Mortgage Calculator for First-Time Buyers

How Much Can You Borrow?

Most lenders cap mortgage lending at 4 to 4.5 times your gross annual income. On a £35,000 salary that is £140,000–£157,500; on a £50,000 salary it is £200,000–£225,000; a couple earning £70,000 combined could borrow £280,000–£315,000.

Lenders also stress-test affordability — they check that you could still meet repayments if the interest rate rose by roughly 3 percentage points above the offer rate. This stress test is why your approved borrowing may be lower than the simple income multiple suggests.

Deposit size also affects the maximum. A 5% deposit (95% LTV) typically unlocks fewer products than a 10% deposit, and some lenders only offer their highest loan multiples at 75–80% LTV or lower. Building up to a 10% deposit improves both borrowing capacity and the rate you are offered.

How Much Deposit Do You Need?

The minimum deposit for most residential mortgages is 5% of the property value. At 5% you are borrowing at 95% LTV — the highest-risk tier for lenders, which means fewer product choices and higher rates.

Reaching 10% opens meaningfully better rates and a much wider choice of lenders. The jump from 5% to 10% deposit often saves more in interest over the mortgage term than the extra saving time costs. At 20%+ you access best-buy products and eliminate the need for any government-backed mortgage guarantee.

Your deposit must also be "clean" — lenders will ask for evidence of savings built up over at least three months (a bank statement trail). Gifted deposits from family are allowed but must be formally declared in a gift letter, and some lenders require the donor to confirm they have no legal interest in the property.

Monthly Repayment Examples

All figures below are for a repayment (capital and interest) mortgage over 25 years, rounded to the nearest pound.

Loan Amount	4.5% / month	5.0% / month	5.5% / month
£150,000	£834	£877	£921
£200,000	£1,112	£1,169	£1,228
£250,000	£1,390	£1,461	£1,535
£300,000	£1,668	£1,753	£1,842
£350,000	£1,946	£2,046	£2,149

These are principal-and-interest repayment figures only. Your true monthly housing cost will also include buildings insurance (required by lenders), any service charge if the property is leasehold, and life or mortgage protection insurance if your lender requires it.

Additional Costs First-Time Buyers Miss

The purchase price and mortgage are only part of the picture. Budget for these upfront costs before you make an offer:

• Stamp Duty Land Tax (England): First-time buyers pay no SDLT on the first £300,000 of a property worth up to £500,000 (as of 2025 — check current thresholds at gov.uk, as rates change). On properties worth £300,000–£500,000, 5% applies to the amount above £300,000.
• Solicitor / conveyancing fees: £1,500–£3,000 depending on property value and complexity. Fixed-fee conveyancers are available but check what is included — searches, Land Registry fees, and bank transfer charges are often added separately.
• Property survey: A HomeBuyers Report costs £400–£900 and is suitable for most standard properties. A Full Structural Survey costs £800–£1,500 and is recommended for older, unusual, or visibly distressed properties. The mortgage valuation your lender carries out is for their benefit, not yours.
• Mortgage arrangement fee: £0–£2,000 depending on the product. Always compare the total cost of fee-free vs fee-charging products by adding the arrangement fee to the total interest payable over the initial fixed term.

First-Time Buyer Schemes

Three government-backed schemes can help first-time buyers get on the ladder with a smaller deposit or at a lower price:

Lifetime ISA (LISA)

Save up to £4,000 per year and receive a 25% government bonus (up to £1,000/year) added automatically. The bonus can be used toward purchasing a first home worth up to £450,000. The account must be open for at least 12 months before it is used for a property purchase. Withdrawing for any other purpose before age 60 incurs a 25% withdrawal charge — which effectively claws back more than just the bonus on savings made after 2021.

Shared Ownership

Buy a share of a property (25%–75%) and pay subsidised rent on the portion you do not own. You only need a deposit on your share, substantially reducing the upfront cash required. Over time you can staircase — buy additional shares — until you own 100%. Note that resale can be restricted (the housing association often has the right of first refusal), and service charges and ground rent still apply on the full property.

First Homes Scheme

Offers new-build properties at a 30–50% discount to market value for local first-time buyers (and key workers in some areas). The discount is passed on to future buyers when you sell, so the property is permanently discounted. Availability is area-specific and subject to local authority allocation — check your local council's planning portal for current developments.

Frequently Asked Questions