Government schemes
To further assist first-time buyers, there are several government initiatives aimed at making homeownership more achievable, including:
- The First Homes scheme. Only available in England, it makes it possible for qualifying first-time buyers to purchase a home for 30% to 50% less than its market value. The home must to be their only or main residence and there is a list of eligibility criteria that needs to be met.
- A Lifetime ISA (Individual Savings Account). A Lifetime ISA is designed to help first-time buyers purchase their first home or save for later life and allows you to add up to £4,000 annually until you’re 50. Your first payment into your plan must be before you are 40. The government will contribute a 25% bonus to your savings, up to a maximum of £1,000 a year.
You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.
By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme or personal pension scheme:
(i) you may lose the benefit of contributions from your employer (if any) to that scheme; and
(ii) your current and future entitlement to means tested benefits (if any) may be affected.
- Help to Buy. Only available in Wales to buyers who meet strict eligibility criteria, the Help to Buy scheme allows FTBs to secure a loan to help with the cost of a new-build home. You would need to provide a 5% deposit. The initiative provides an Equity Mortgage of up to 20% of the purchase price. You would need a repayment mortgage to cover the remaining sum.
If you already have a Help to Buy ISA, you can pay into it until November 2029 and can claim the 25% bonus (up to £3,000) when you purchase your first home, until November 2030. If you are purchasing with someone who has their own Help to Buy ISA, both of you will get the 25% bonus.
Arguably, rates matter more for first-time buyers than any other property purchaser. In addition to having to pass lenders’ affordability requirements, there is budgeting to consider, and the likelihood that they will need to furnish their new home. Add in the long-term cost and it’s clear why getting a suitable mortgage product is so essential for those entering the property market.
How first-time buyer rates are set
Mortgage rates for first time buyers are influenced by many factors, including:
- Deposit / Loan to Value (LTV). The FTB mortgage market is influenced by the LTV ratio. High LTV mortgages of 90% to 95% are becoming ever more common.
- Term length. Shorter-term fixed-rate mortgages usually mean lower rates, though you will need to investigate remortgaging sooner; while longer-term mortgage deals offer more stability and peace of mind for longer, yet might be less cost-effective if interest rates fall. First-time buyers must consider which term is right for them as a mortgage product with higher interest rates may affect their affordability. Conversely, as new homeowners, the thought of knowing monthly repayments for longer can be very reassuring.
- Key lender criteria. Factors such as your income, employment stability and credit history will shape which types of deals you’ll have access to.
Rates shown are indicative only and used for illustrative purposes. Actual rates vary by lender, product, borrower profile and market conditions at the time of application.
| LTV | Term | Initial rate | Revert rate |
|---|
| 90% | 2-year fixed | 4.15% | 6.09% |
| 90% | 5-year fixed | 4.26% | 6.79% |
| 95% | 2-year fixed | 4.59% | 6.34% |
| 95% | 5-year fixed | 4.63% | 7.39% |
Improved affordability conditions ease applications for first-time buyers
Affordability conditions for first-time buyers have continued to improve during 2026 as mortgage pricing has stabilised, wages have risen and house price growth has remained modest. Lloyds continues to highlight that improving affordability reflects a combination of wage growth, more stable mortgage pricing and slower house price growth.
100% first-time buyer mortgages have been reintroduced in the UK market, marking a significant development for first-time buyers. Returned in recent years, these mortgages allow first-time buyers to purchase homes without needing a deposit, making homeownership more accessible.
The increasing demand for higher leverage mortgage borrowing is being attributed to the challenges first-time buyers face in saving for a deposit during the current cost of living crisis, as well as the shrinking rental sector.
Ollie’s opinion
First-time buyers often ask me, “Is now a good time to buy?” and my honest answer is:
Yes, I think it’s a great time to buy. Affordability has significantly improved in the last 12 months thanks to many mainstream and specialist lenders launching “Boost” style products.
This has not only improved how much you can borrow but also opens up more lenders that may have better rates and criteria. Rates remain competitive compared with recent years and are generating payments that are affordable for many buyers.
Most analysts continue to expect modest house price growth through the remainder of 2026, so delaying a purchase could still mean needing a larger deposit in the future.
Add into the equation that there are more and more low-deposit, and even some no-deposit, options – it’s a perfect time to buy.
I think first-time buyers need to ask themselves this key question: “What are your alternatives?”. Rent? Rents are extremely expensive and all you will be doing is paying someone else’s mortgage for them. Stay living with family? Well, yes you could, but do you want to?
It’s also worth considering the reality of market forces – if mortgage affordability continues to improve, demand for housing continues to rise and the supply of new build homes continues to be low, then house prices are likely to start rising very fast. Don’t hang about!
Oliver Peace
BA(Hons) CeMAP DipFA
Managing Director and non-advising Firm Principal
A bit about Oliver…
After gaining his CeMAP qualification, Oliver began his career in financial services in 2007 as a mortgage adviser specialising in remortgages. In 2010, after gaining invaluable experience helping individuals and families, of all walks of life, rework their finances to improve their lives, Oliver found the confidence to launch James Leighton Financial Services. His objective was to offer the full spectrum of financial services to his customers and whilst building a new and loyal client base, gained his Diploma in Financial Advice, which allowed him to advise his clients on pensions and investments. After building a relationship with a new build developer in 2011, with Oliver at the helm, the firm saw exponential growth from a sole trader to the firm that we see today, with a team of around 50 professionals, national coverage and a reputation as one of the foremost new build specialists in the country. Oliver believes that the success of the firm is down to one of the firm’s core values which is to genuinely care about their customers by focussing on improving their lives. By treating each customer as if they are a member of the family has helped build real trust and long term repeat business.
Oliver’s interests out of work centre around spending time with his daughter, enjoying holidays in the UK and abroad and, when he has time, furthering his passion for sportscars.
