What is a Mortgage?

A mortgage is a loan used to buy a home. It’s provided by a bank or building society.

You repay it over a set term, often 25 to 35 years, including interest.

The loan is secured against the property, so the lender can repossess it if payments stop.

Mortgages are common in the UK and allow homeownership without needing the full price up front.

How to Get Ready for Your First Mortgage

Strong preparation can improve your chances of being accepted by lenders.

Step-by-Step Preparation:

• Check your credit score — Get your file from Experian, Equifax or TransUnion. Correct any mistakes.

• Reduce existing debts — Lower credit card balances and repay personal loans where possible.

• Save for a deposit — Aim for 5–10% of the property price as a minimum.

• Gather documents — Collect payslips, P60s, utility bills, ID, and recent bank statements.

• Set a budget — Calculate what you can afford to repay monthly.

• Get mortgage advice — An adviser can find the most suitable options for your situation.

💡 Tip: Plan for solicitor fees, surveys, removals, and other one-off buying costs.

Different Types of Mortgages for First-Time Buyers

Mortgages come in different types, each with pros and cons. Choose what fits your income and risk level.

Fixed-Rate Mortgage

• What is it? The interest rate stays the same for a fixed period, usually 2 to 5 years.

• Pros: Monthly repayments stay consistent.

• Cons: You won’t save if rates drop.

Tracker Mortgage

• What is it? Follows the Bank of England base rate plus a set percentage.

• Pros: Lower payments if the base rate drops.

• Cons: Payments may rise if rates increase.

Interest-Only Mortgage

• What is it? You only pay interest each month. The original loan must be repaid later.

• Pros: Monthly payments are lower.

• Cons: You need a separate plan to repay the full balance.

Standard Variable Rate (SVR)

• What is it? Your lender’s default rate after an introductory deal ends.

• Pros: No early repayment charges.

• Cons: The rate can rise at any time.

Fixed vs. Variable Rate Mortgages: Pros & Cons

Most first-time buyers choose fixed rates for more predictable payments in the early years.

Preparing Your Finances

Lenders use strict checks to confirm affordability. Be prepared with documents and clear financial records.

What Lenders Look At:

• Your income (employment or self-employment)

• Monthly expenses (including loans and household bills)

• Credit report and score

• Size of deposit

• Employment stability and history

• Affordability under stress tests

Documents You’ll Need:

• Passport or driving licence

• Recent utility bills or council tax letters

• Payslips or tax returns

• Three months of bank statements

• Evidence of deposit source

Finding the Right Lender or Mortgage Broker

Lender:

• Offers mortgages directly

• Only shows their own products

Mortgage Broker:

• Searches across multiple lenders

• Helps match a mortgage to your needs

💡 Tip: Brokers may access exclusive rates not available on the high street and handle all paperwork.

What is an Agreement in Principle?

An Agreement in Principle (AIP) gives a rough idea of how much you could borrow.

It’s not a formal offer, but it shows sellers and estate agents that you’re serious.

• Helps during house viewings

• May give you a competitive edge

• Often leaves no trace on your credit file

Getting one is free, fast, and shows your budget range to sellers.

What Affects Your Mortgage Application?

Lenders assess:

• Deposit amount

• Credit file and payment history

• Monthly income and outgoings

• Job stability and contract type

• Existing loans or financial obligations

• Property type (leasehold or freehold)

Always give accurate information, mistakes could delay or weaken your application.

Questions to Ask Before Signing

Before accepting a mortgage offer, ask:

• What is the total cost across the full term?

• Are there early repayment charges?

• What happens after the initial deal ends?

• Are there product or arrangement fees?

• Who manages the mortgage, and how do I contact them?

Understanding every cost and clause is essential before you proceed.

Tips to Improve Your Mortgage Chances

• Build a strong credit history

• Save a larger deposit if possible

• Reduce debts and regular outgoings

• Stay in long-term employment

• Avoid new borrowing before applying

• Keep financial records organised

• Use a mortgage broker for tailored guidance

Your First Home Starts with the Right Mortgage

Buying your first home is a big step but a well-chosen mortgage makes it manageable.

With clear planning, strong paperwork, and expert advice, you’ll be in your new home sooner than you think.

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