Best first-time buyer mortgages available right now – July 2024

Finding your first mortgage can be a challenge particularly when mortgage lenders keep changing the cost of their deals sometimes at short notice.

Thankfully, the mortgage market has calmed down for the time being. 

Rates have stabilised, with some small price rises, and there are still plenty of mortgages available for first-time buyers with a range of needs from low or no deposit, those in need of family assistance or borrowers looking for fee-free options.

Interest rates rose throughout 2023 to combat rising inflation. While things are levelling out in 2024, it is still expected that mortgage rates will continue at current rates. The Bank of England increased the base rate multiple times in 2023 and it now sits at 5.25%.

Adrian Anderson, director of mortgage broker Anderson Harris, says: ‘Rates on first-time buyer deals have come down a little in the first quarter of the year but we have seen a few banks increasing rates again recently. They are currently sitting at a slightly lower level than they were at the end of 2023. 

‘I think we will be seeing rates stay higher for slightly longer than anticipated but I do not think that we will be seeing big increases.’ 

So if you’re looking to buy a house for the first time, it pays to do your research. Some mortgages have special rules exclusively for first-time buyers to make it easier to get on the ladder. Others offer a lower rate in exchange for a higher fee, while some banks give borrowers cash or a free valuation as an incentive. 

If you only have a small deposit, there’s help for you too. 

Nicholas Mendes of broker John Charcol says: ‘There are a range of schemes currently available which mean you can secure a property with a 5% deposit, however, there are several factors to consider before opting for a 95% mortgage. 

‘Lenders typically charge higher interest rates when you have a small deposit. This means you may end up paying more in interest over the life of the loan compared to a mortgage with a larger deposit. It's crucial to ensure that the monthly mortgage payments are affordable. Consider your income, expenses, and potential future changes in circumstances.’

The pool of lenders tends to reduce when you have a small deposit and may only be available to those with a clean credit history.

It’s a good idea to make yourself as attractive a borrower as possible - if you’re not sure where to start, here’s how to boost your chances of mortgage approval. 

Best first-time buyer mortgages July 2024

Rates are subject to change, but were correct at the time of writing. These options are for illustrative purposes only, speak to your lender or a mortgage broker to find the best mortgage deal for your circumstances.   

Early repayment charges apply. No valuation costs. Minimum loan size is £6,000. 

Five-year fixed rates are currently cheaper than two-year fixes because rates are expected to fall during the term of the mortgage deal. Some borrowers may need to opt for the cheapest rate now to fit their budget. Speak to a broker before locking into a five-year – it is expensive to leave early. 

Early repayment charges apply. Deal is available on interest-only as well as capital repayment. Not available for shared ownership or shared equity purchases. 

Free valuation. Early repayment charges apply. 

Barclays also offers a two-year fixed rate at 4.72% with an £999 fee, also with a free valuation.

Early repayment charges apply. Minimum loan amount £150,000. Only available through a mortgage broker. 

Free valuation. Early repayment charges apply. The early repayment charge remains at 4% throughout the product term instead of gradually reducing, which is typical of this type of charge. 

Early repayment charges apply. A £150 booking fee applies on application. Only available through a mortgage broker. Not available on new-build flats or apartments.

Should first time buyers choose a fixed-rate mortgage?

Even though inflation dropped to 4% in the 12 months to January, household budgets are still under pressure so the type of mortgage you choose will depend on multiple factors. Whether you prefer a fixed or variable rate depends on your financial position and your attitude towards the risk of rising interest rates.   

Fixed-rate mortgages, give borrowers certainty over their monthly budget for a period of time. The most common periods you can fix your mortgage rate for are two or five years. You can also fix for three, seven and 10 years but, lacking in popularity, they are not as widely available. 

Variable rates can sometimes be cheaper but borrowers must have room in their budgets for an increase in their monthly mortgage payment if interest rates do rise within the term of their deal.  

Not sure how much you'll be able to borrow? Use our mortgage calculator as a guide.

How to find the best first-time buyer mortgage rates

You can search online for the best first-time buyer mortgage rates using a price comparison website. By submitting basic details such as your annual salary, credit commitments and the value of your deposit you’ll find out how much you can spend on a house and which lenders are offering the cheapest deals.

You can also use an online mortgage broker. After completing an online questionnaire and a credit check you’ll be sent a list of mortgage deals with the cheapest rates tailored to your circumstances.

Or you can ask a traditional mortgage broker to search for the best deals on your behalf. After a phone call or face-to-face interview, they will select the best deals for your circumstances rather than just the lowest rates.

What kind of first-time buyer mortgage could I get?

Banks and building societies typically offer first-time buyers a mortgage that is between 4.49 and 4.75 times their annual salary. Some lenders will offer up to 5.5 times salary for first-time buyers with larger deposits or higher salaries.

Lenders also offer a range of low or no deposit deals, fee-free options, cashback incentives and mortgage terms of up to 40 years if you want to keep your monthly repayments low. 

There are also lots of mortgages designed to specifically help first-time buyers or those struggling to raise a deposit or pass affordability checks.

Family assist mortgages

Barclays, Lloyds and Halifax offer options where parents can deposit savings with their mortgage lender for a fixed term, usually in line with the term of the fixed rate. By doing so the first-time buyer can put down little to no deposit. At the end of the fixed term, if the first-time buyer is up to date with their payments, the parents get their savings back with interest.

Joint borrower sole proprietor

Some mortgage lenders also allow parents to join their children on the mortgage application to boost their income if they are still working or have sufficient retirement income. By doing so, parents are agreeing to pay the mortgage if their children cannot but they do not own the property.

First Homes Scheme

This is a government scheme which involves the building of new homes specifically to be sold at a discount of at least 30% (can be increased up to 50% by the local council).

This scheme is only available to first-time buyers. Priority is also given to serving members of the armed forces and key workers.

Shared Ownership

Under the shared ownership scheme, a first-time buyer can purchase a share of the property and pay rent on the remaining share. A deposit is still required and the first-time buyer must be able to afford the mortgage and rent but it can be a good way to buy your first property as you don’t have to find the money for the full property value.