28th March 2020
If you’re a first-time buyer and you’re saving for your first home, you’ll want to know how much deposit you’ll need to get together as early on in the process as possible. Just to clarify – you’ll be classified as a first-time buyer if you’ve never owned a property, either freehold or leasehold in the UK or abroad.
In most cases, you’ll need to have a deposit of between 5% and 20% of the cost of your first home. The more you save, the less you’ll need to borrow and the greater access you’ll have to more mortgages with better rates as you’ll be a less risky investment for lenders.
The difference between the deposit you’ve saved and the first-time buyer mortgage you need is known as the loan to value (LTV) ratio – the higher your LTV, the higher the interest rate you’re likely to pay.
Remember there are other costs associated with buying a new home. You’ll need to pay solicitor’s fees, survey and search costs, mortgage arrangement and valuation fees, buildings insurance and removals costs. You’ll also need to pay Stamp Duty Land Tax (SDLT) – as a first-time buyer, you’ll pay no Stamp Duty on the first £300,000 for homes worth up to £500,000.
Buying your first home can be as nerve-wracking as it can be exciting, so talk to our team of expert mortgage advisers about your options and we’ll guide you through the process. Call us on 08454 500200 or click here to make an enquiry.
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