First-Time Buyer Guide UK: Deposits, Schemes and How to Start

TL;DR: You can buy with a 5% deposit through 95% loan to value deals and the Mortgage Guarantee Scheme, which became permanent in July 2025. Bigger deposits unlock meaningfully better rates, with the big steps at 10%, 25% and 40% deposits. Brand new: the “Your First Home” scheme announced 26 September 2026 pairs a 2.5% deposit with an interest free government equity loan of up to 20% on new builds in England, with full details due at the Budget on 28 October.

How much deposit do you actually need?

Five percent is the realistic minimum via 95% mortgages. But rates improve as your deposit grows, because lenders price by loan to value. Indicative average fixed rates in mid September 2026: 60% LTV around 4.7%, 75% around 5.0%, 85% around 5.1%, 90% around 5.3%, 95% around 5.75%. Those move daily, but the pattern is constant: every extra 5% deposit tends to buy a cheaper rate. The median first-time buyer deposit was £36,500 in 2024/25, and most buyers put down under 20%.

Work out your exact bill with our free stamp duty calculator, using 2026/27 rates with first-time buyer relief included.

The schemes available now

Note: the old Help to Buy equity loan closed in October 2022. If a guide still presents it as live, the guide is out of date.

How much can you borrow?

Most lenders start from 4 to 4.5 times your income, with enhanced multiples of 5 to 6.5 times increasingly available to strong applicants. The old Bank of England rule forcing lenders to test you at 3 percentage points above their rate was scrapped in 2022, but lenders still run their own affordability tests, often around 6 to 7%. Your credit file matters here: check it months before applying, not days.

The steps, in order

1. Check your credit file and fix errors early.
2. Work out your budget: deposit plus stamp duty (2026 rates here), fees, survey and moving costs.
3. Get an agreement in principle from a lender or broker so sellers take you seriously. How it works.
4. Save systematically: automate a monthly transfer the day after payday, and consider a Lifetime ISA for the 25% bonus.
5. View, offer, and apply once your deposit target is in sight.

Frequently asked questions

Can I buy with no deposit?

There is no mainstream 100% mortgage market right now. The lowest entry routes are the 2.5% deposit under the new Your First Home scheme (new builds, England) and 5% via 95% mortgages.

Is shared ownership worth it?

It gets you on the ladder sooner with a smaller deposit, but you pay rent on the part you do not own, plus service charges, and selling can be slower. Run the full monthly cost against renting and against waiting to buy outright.

When does Your First Home launch?

Full details are expected at the Budget on 28 October 2026. Treat current announcements as provisional until then.

Should I wait for rates to fall?

Nobody knows the path of rates, and waiting has a cost too: rent paid and prices moving. Buy when the monthly payment is affordable on your income with room to spare, not on a rate prediction.

Facts checked 1 October 2026; schemes and rates change. General information, not financial advice. Sources: GOV.UK: Mortgage Guarantee Scheme, MoneyHelper: buying a home.

Part of our Mortgages and Property hub: guides to remortgaging, stamp duty, first-time buyers and more.