First-Time Buyer Mortgages

First-time buyers are clients purchasing their very first home. It’s a major financial and personal step, and understanding how the process works, from affordability and agreement in principle through to offer, valuation and completion, is key to making confident decisions.

At Lewis Christopher we provide first-time buyer mortgage advice in Milton Keynes, Bedfordshire and across Buckinghamshire, whether you are buying on your own, with a partner or friend, or with help from family. This page covers the questions first-time buyers ask us most: getting an agreement in principle, working out how much you can borrow, and using a deposit that has been gifted to you.

Most purchases follow the same broad sequence:

1. Agreement in principle. A lender’s initial indication of how much it may be willing to lend, based on your income, outgoings and credit history.
2. Finding a property. Estate agents will often ask to see your agreement in principle before they put your offer to the seller.
3. Full mortgage application. The lender checks your documents, runs a full credit search and arranges a valuation of the property.
4. Mortgage offer. Once the lender is satisfied with you and the property, it issues a formal offer.
5. Exchange and completion. Your solicitor or conveyancer handles the legal work, contracts are exchanged and the funds are released on completion day.

A mortgage agreement in principle, sometimes called a decision in principle or a mortgage in principle, is a statement from a lender that it would be prepared to lend you a certain amount, subject to a full application. It is usually the first practical step in buying a home, and it gives you a realistic budget before you start viewing properties.

An agreement in principle is not a mortgage offer. The lender has not yet checked your documents or valued the property, and it can change its decision when you apply in full. Many lenders use a soft credit search at this stage, which does not affect your credit score, but practice varies, so it is worth knowing which type of search will be used before anything is submitted. Agreements in principle typically last between 30 and 90 days, depending on the lender, and can usually be renewed if your search takes longer.

Choosing the right lender at this stage matters. An agreement in principle from a lender whose criteria do not suit you can give a misleading budget, and repeated applications to different lenders can leave a trail on your credit file. We look at your income, deposit and credit history first, then obtain an agreement in principle from a lender that is likely to suit your circumstances. This will normally only leave a soft footprint on your credit file.

Lenders start with your income, but what they will lend depends just as much on your outgoings. Many lenders lend up to around 4.5 times income, and some will go to 5.5 or even 6 times for first-time buyers who meet tighter conditions, such as a minimum income, a larger deposit or a longer fixed rate. Those higher limits are the exception rather than the rule.

Affordability checks look at your regular commitments, including credit cards, car finance, childcare and other loans, and lenders test whether you could still afford the payments if interest rates rose. Two applicants on the same salary can therefore be offered very different amounts.

Many lenders actively support first-time buyers and offer products or criteria designed to help those with smaller deposits or who are currently renting. This can include enhanced affordability assessments or higher loan-to-value mortgages in certain circumstances. The right approach will depend on your income, deposit, credit profile and long-term plans.

Indicative market figures only. Individual lender criteria vary and change over time.

Mortgages with a deposit of 5% of the purchase price, known as 95% loan-to-value mortgages, are widely available to first-time buyers. The government’s Freedom to Buy scheme, which supports lenders offering these mortgages, was made permanent in July 2025.

A smaller deposit gets you onto the ladder sooner, but it usually means a larger loan and a higher interest rate. Rates generally improve as your deposit increases, so it can be worth comparing the cost of buying now against waiting until your deposit is larger.

Indicative market figures only. Individual lender criteria vary and change over time.

Many first-time buyers receive help with their deposit from family, most often from parents or grandparents. Lenders will generally accept a gifted deposit, but they need to be satisfied that it is a genuine gift rather than a loan. In practice that usually means:

• a gifted deposit letter or declaration, signed by the person giving the money, confirming that it is a gift, that they do not expect it to be repaid and that they will have no share in the property
• identification for the person giving the gift, and evidence of where the money has come from, usually bank statements
• the money reaching your account, or your solicitor, before completion

Some lenders are more cautious about gifts from friends or more distant relatives, and each lender has its own form and rules, so it is worth checking these before you apply.

A gift can also have inheritance tax implications for the person giving it. Gifts are generally free of inheritance tax if the giver lives for seven years afterwards, and everyone can give away £3,000 each tax year without it being added to their estate. If the person giving the deposit is thinking about their own estate, our inheritance tax planning advice can help them understand the position.

Where someone wants to help with the mortgage itself rather than the deposit, a joint borrower sole proprietor mortgage may be an option. The helper is often a parent, but some lenders also accept other relatives and, in some cases, people outside the family. The helper's income is added to the application to support affordability, but they are not named on the property's title.

Because the helper is not an owner, the buyer can still claim first-time buyer stamp duty relief, even if the helper already owns a home. The helper is, however, responsible for the whole mortgage, not just a share of it, so if the payments are not made the lender can look to them for the full amount. We can explain whether this would suit your circumstances.

Buying with a partner, friend or relative means combining incomes, which can increase what you are able to borrow. It also means you are each responsible for the whole mortgage, not just your share, so if one of you cannot pay, the other is liable for the full monthly payment.

You will also need to decide how you own the property. As joint tenants you own it equally and it passes automatically to the survivor, while as tenants in common you can own unequal shares, for example where one of you has put in a larger deposit. Your solicitor will explain the options, and it is worth agreeing this before you buy.

Both of you must be first-time buyers to claim first-time buyer stamp duty relief. If either of you has owned a home before, anywhere in the world, the relief does not apply.

New-build homes are a big part of the Milton Keynes market, and buying one works a little differently. Many lenders set a lower maximum loan-to-value on new builds, and lower again on new-build flats, so you may need a larger deposit than for an older property.

Any incentives from the developer, such as cashback, help with legal fees or a contribution to stamp duty, must be declared to the lender, and incentives above a certain level can reduce the amount it is willing to lend. If the home is still being built, timing matters too: a mortgage offer has an expiry date, and a delay to the build can mean the offer needs extending or reissuing. We can check which lenders suit the development and its timescale before you reserve.

Indicative market figures only. Individual lender criteria vary and change over time.

First-time buyers in England and Northern Ireland pay no stamp duty on the first £300,000 of the purchase price and 5% on the portion between £300,001 and £500,000. If the price is over £500,000, the relief does not apply and standard rates are paid instead.

If you are saving towards a deposit, a Lifetime ISA can currently be used for a first home or for saving for later life, but the government is reviewing them with a view to bringing in a dedicated First Time Buyer ISA. You must be aged between 18 and 39 to open one. You can put in up to £4,000 a year and receive a government bonus of 25%, up to £1,000 a year. To use it for a first home, the property must cost £450,000 or less, you must be buying with a mortgage, and your first payment into the account must have been made at least 12 months before you buy. Withdrawals that do not meet the rules carry a 25% charge.

Because buying your first home is such a significant commitment, it’s important to be clear on what you’re taking on: both the mortgage itself and the ongoing costs of home ownership. Alongside the deposit, allow for stamp duty where it applies, solicitor’s fees, a survey, any mortgage fees and the cost of moving in.

Figures correct at the time of writing. Tax rules and allowances can change.

Our role is to guide you through the process, explain the options in plain English and help you choose a mortgage that is affordable and sustainable, so you can take your first step onto the property ladder with confidence.

Once your mortgage is in place, we can also talk about protecting it, for example with life insurance so that the loan would be repaid if the worst happened, and income protection to help keep up the payments if you could not work because of illness or injury.