Understanding how mortgages work can be overwhelming, particularly as various options are available. In this article, we will explain to help you navigate the process, particularly if you are a first-time buyer.

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What are mortgages?

A mortgage is a loan that helps you purchase a property and generally repay it over several years while living there. The mortgage typically begins with a special rate lasting two to five years. When this period ends, you will usually transition to the lender’s standard variable rate, generally higher than your initial rate. However, at this stage, you can remortgage to another special deal.

When you apply for a mortgage or any other loan, lenders must ensure you can repay the borrowed amount. This involves providing information about your income and expenses to verify that you can manage regular payments.

How long do mortgages last?

Most mortgages have a term of 25 years, but some lenders may offer longer terms based on your age and situation, up to 30 years or more. Alternatively, you could choose a shorter term, such as 15 or 10 years, if you can afford higher monthly payments and want to pay off your mortgage faster.

You can choose a longer term for your mortgage to make it easier to manage payments. However, this means you’ll end up paying more interest overall. If you choose a shorter term, your monthly payments will be higher, but you’ll pay less interest overall and clear your mortgage faster. Consider your monthly budget carefully and compare costs for different term lengths to make the best choice.

Do I need a mortgage?

If you don’t have a substantial amount of savings, it’s unlikely that you’ll be able to purchase a property without taking out a mortgage. The size of the mortgage you require will be determined by the amount of money you’ve saved for a down payment. Typically, you’ll need to save at least 5% of the property’s value, but the more you can save, the greater the range of mortgage options available.

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Can I get a mortgage?

Your situation determines your eligibility for a mortgage. Lenders will check if you can pay the monthly fees and examine your debt history. Requesting a copy of your credit report before applying is recommended, so you can check your score. Closing unused credit accounts, paying off debts, and always making timely repayments can help improve your credit score.

Frequently Asked Questions

A person is generally classified as a first-time-buyer if they’re buying their only or main residence, and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad¹.

A mortgage is a loan taken out to buy property or land. Most run for 25 years, but the term can be shorter or longer 2.

You’ll usually need to save at least 5% of the cost of the home you’re buying as a deposit. For example, if you want to buy a home costing £200,000, you’ll need to save at least £10,000 (5%)¹.

Stamp Duty Land Tax (SDLT) is a tax on properties bought in England and Northern Ireland. You’ll need to pay it if you buy a property:

Property valueSDLT rate
Up to £425,0000%
The next £500,000 (the value between £425,001 to £925,000)5%
The next £575,000 (the value between £925,001 to £1.5 million)10%
The remaining amount (the value above £1.5 million)12%
First-time buyers pay no SDLT on purchases up to £425,000 and then pay 5% on the portion from £425,001 to £625,00. Use the government SDLT calculator for exact results.

Conveyancing is the legal process of transferring ownership of property from one person to another⁴.

Gazumping is when someone makes an offer on a property that has already been accepted by another buyer³.

Help to Buy is a government scheme that helps first-time buyers get on the property ladder by offering an equity loan of up to 20% (40% in London) of the purchase price of a new-build home⁵.

Shared ownership allows you to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share5.

The amount you can borrow will depend on your income and outgoings, as well as your credit history¹.

The average time it takes to buy a house is around three months⁴.


  1. First-time home buyer guide | MoneyHelper. https://www.moneyhelper.org.uk/en/homes/buying-a-home/first-time-buyer-money-tips
  2. Buying your first home in 2022: five things to consider. https://www.which.co.uk/news/article/buying-your-first-home-in-2022-five-things-to-consider-aCbOn3Y0lQop
  3. First-time buyer? A handy cheat sheet for the most common questions …. https://www.standard.co.uk/homesandproperty/buying-mortgages/buying-a-home-common-questions-first-time-buyer-answers-b973621.html
  4. UK first-time buyer schemes: Everything you need to know. https://www.homeviews.com/blog/uk-first-time-buyer-schemes-everything-you-need-to-know
  5. First-time buyers | Money | The Guardian. https://www.theguardian.com/money/firsttimebuyers
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