First time buyer guide getting started

We have different types of mortgages with different types of interest rates. These change from time to time. We'll let you know what's available when you apply.

When you have your mortgage appointment, your mortgage adviser will find out what mortgage is right for you. You’ll discuss the various types of mortgages, interest rates and any associated fees.

There are two main types of mortgage:

Fixed rate mortgage

• The interest rate is fixed for a set time. This means you can plan your finances with more certainty, as your interest rate won't change. The fixed rate usually lasts for 1 to 5 years, but sometimes longer.
• Once the fixed rate ends, we switch you to another rate, usually one of our lender variable rates. Your new interest rate may be higher or lower than the rate you’ve been paying. Prepare for any change and keep this in mind when budgeting.
• When your fixed rate period ends, you may want to apply to move your mortgage to a new fixed rate product for a further period of time or you could keep it on the variable rate.

Tracker mortgage

• This mortgage follows the Bank of England base rate, meaning the interest rate is variable. Therefore, you could save money if the base rate is low. Or you could pay more if the base rate is high.

Use our mortgage calculator to see our current mortgage deals. You can get an idea of how much you could borrow and compare what the monthly payments will be.

Special offers

From time to time, we may include a special offer with our mortgages. The interest rate for these mortgages may be a bit higher than usual. So you'll need to think about what's more important to you: a mortgage with a special offer, or a mortgage that may have a lower interest rate.

Find out more about our special offers for first time buyers.

There are various properties for you to choose from. We'll value the property before deciding if we can lend to you.

Self-build mortgage

If you are building a new house, some schemes will offer you the money in stages. This means you’ll get some of the money as work on the house progresses. We’ll visit the property and check the progress, based on the agreed terms.

When the property is finished and you’re living in it, you can then apply for a mortgage with us. You will need to be eligible and choose a mortgage that’s available at the time.

Buy to let mortgages

A buy to let mortgage is a loan to buy a property that you will rent out to tenants. The most you can borrow is linked to the amount of rental income we think you could earn. Investing in buy to let property is a risk. You should be an experienced house buyer and know about investment properties.

These mortgages aren't available to first time buyers or anyone under the age of 25. At least one person applying for the mortgage must currently own a property in the UK.

Shared ownership

Shared ownership is usually offered by registered social landlords or local authorities. With this type of mortgage, you buy a share of a property – say half – and pay less rent for the other share. The share you first buy may be as little as 25%. But you can buy more shares until you own the entire property.

Shared equity

Usually you own 100% of the property and so there is no rent to pay like under a shared ownership scheme. The shared equity part relates to the fact you’re taking out an equity loan which counts towards your deposit.

The advantage is that you often only need to raise a 5% deposit yourself, with the equity loan making up the rest of the deposit.  But if property prices rise over the next few years, the size of your loan will increase too. This means that in the long-term you may end up having to pay more under a shared equity scheme, than if you were just to save up a bigger deposit and get a standard mortgage.

The government offer an equity loan scheme and some property developers also offer their own shared equity schemes, as it helps them sell the homes they have built.

New-build or converted properties

To get a mortgage on a property that's been built or converted in the last ten years, it should be part of a building standards scheme. This tells us that the building was completed to good standard, by a qualified professional. Ask your estate agent if this applies to the property you’re interested in.

How much do I need to save for my deposit?

• We'll only lend you a percentage of what you need to buy the property. We base this percentage on the value of the property or how much it is sold for (whichever is lower). So you'll need to use some of your own money to buy the property – a deposit.
• We will only lend you a percentage of what the property is worth, so you will need to put down some of your own money towards the cost of the property. We call this a deposit. At the moment, your deposit should be at least 10% of the property’s value. If you can put down more than 10%, you can often get a lower initial interest rate.
  
• Our Mortgage calculator will give you an idea of how much you can borrow and what your monthly mortgage payments could be.
• There are government backed schemes designed to help you save your deposit faster. To find out more, see our ‘getting some help’ section of this guide.

Need help saving for your deposit?

Have a look at our savings tips page and view our savings range to help you get started.

There are government backed schemes designed to help you save your deposit faster. To find out more see our 'getting some help' section of this guide.

Costs when applying for a mortgage

As well as your deposit, there are other costs involved in buying a property and taking out a mortgage. Here are some costs that apply to most buyers:

• Product fee
  Some mortgages also have a fee. You pay this when you apply. Most fees can be added to the total amount you pay back. Keep in mind: by adding the fee to your total mortgage amount, you will pay interest on it over the term.

• Valuation fee
  The valuation fee depends on the type of valuation you choose.
  There are two levels of valuation you can choose and these rise in cost: A Mortgage valuation which is required to value the property, but gives you limited information; A survey and valuation (often referred to as a Homebuyers report) which tells you information such as defects and problems that are serious or that may significantly affect the value.
  Should you require a more detailed assessment of the property you are able to obtain a Building Survey which is a more comprehensive inspection of the property. You will need to obtain this independently and we will not receive any information from your chosen surveyor. As a result you would still need to obtain a level 1 valuation from us so that we can give you a lending decision on your application. The valuation fee must be paid upfront and is non-refundable.
  You'll be able to discuss valuations and fees with one of our mortgage advisers when you apply, but to get more information and an idea of the cost of valuation fees, please visit our valuation schemes page.

• Legal/Conveyancing fees
  To get a mortgage, you'll need a conveyancer (solicitor) to take care of the contracts and documents. The costs can vary between different conveyancers, so its important to look at what is included in any quotes if you are comparing.
  Search fees and Land Registry fees and typical expenses that you will incur as part of the conveyancing process and typically included in quotes you receive.
  You can use our conveyancing service to compare quotes for your legal costs from our panel of up to 200 conveyancers.

Costs when buying your new home

• Removal costs
  You may want to use a removal company to help you move into your new home. Costs can vary, so get a few quotes to compare prices.

• Stamp duty
  If you are buying or selling a property, there will be Stamp Duty Land Tax payable. This is a government tax charged on land and property transactions in the UK. The tax is charged at different rates and has different limits for different types of property and values of transaction.
  This tax is an expensive extra cost that you should take into account when thinking about buying a property.
  For the most up-to-date Stamp Duty limits visit the government’s website, or for properties in Scotland, visit the Revenue Scotland website.
  You can get an idea of some of these costs by using our Mortgage calculator - you’ll need to enter details about the property cost and your deposit under ‘how much will it cost’. The the results will then show in the ‘What else should I budget for?’ section of the mortgage summary.

Costs of running your new home

• Household bills
  When you're working out the cost of buying and running a home, it's important to bear in mind how much your household bills are likely to cost each month.
  
  The main monthly expense will be for gas, electric, water and council tax, but it's also important to think about other monthly costs. Your mobile and landline telephone bills and broadband services can add up, and with so many television options available, it's easy to get carried away.
  
  It's worth using price comparison sites to shop around for a better deal on your utility bills. In some cases you could save quite a bit each month, and some sites will arrange to switch providers for you.
   
• Protecting your new home
  When you've got the keys to your new home, it's important to think about protecting it as soon as possible. You'll already have taken out buildings insurance as part of your mortgage application, but you should think carefully about how you might pay for your mortgage should the worst happen.
  
  Our Mortgage and Protection Advisers can help you to find the right level of cover to protect your mortgage payments in the event of your death, or if you're too ill to work. We have a wide range of policies to suit all budgets and needs, so it's worth giving us a call or making an appointment at your local branch to discuss your options. 

The Mortgage Amount and Monthly Payments

• Use our mortgage calculator to see how much you could borrow and what your monthly payments might be.
• Or to get a better idea of how much you could borrow, you can apply for an Agreement in Principle.

Budgeting

To help you prepare for the different costs involved when buying a home, it’s important you budget properly. If you need any help, our budgeting tool is a good place to start.

Helping you to take the first step on the ladder

Help to buy schemes are set up by the government to help you buy your first home. There are four schemes available: