Simply Mortgages

First Time Buyers

Being a first time buyer is not easy and we understand that taking the first step on the property ladder can be daunting. However, we will be with you every step of the way.

Portrait Of Excited Man Standing Outside New Home With Sold Sign

How Much Deposit Do I Need?

A person is generally classified as a first time buyer if they’re purchasing their only or main residence and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.

Before looking at properties, you need to save a deposit or a family member can provide you with the deposit.

Generally, you need to try to save at least 5% to 15% of the cost of the home you would like. However, the larger the deposit, the lower the rate of interest will be.

For example, if you want to buy a home costing £150,000, you’ll need to save at least £7,500 (5%)

Guarantor and Parental Help Mortgages

Bank of Mum & Dad

Many parents and grandparents want to give their child a hand onto the property ladder and are in a position to do so. With family members willing to take on some of the risk of lending to a first time buyer, some mortgage lenders are prepared to lend more and at a better interest rate.

With an increasing number of guarantor mortgages available on the market, Simply Mortgages can work with you to find the most suitable product for you and your family.

Joint Borrower, Sole Proprietor

The joint borrower sole proprietor option works differently in that your parent contributes to the mortgage without being a co-owner. This can be on a temporary basis until you’re able to cover the payments entirely.

This means your parent could help you to potentially buy a bigger and more desirable home without them actually being an owner.

A number of lenders offer joint borrower sole proprietor mortgages, including Barclys and Metro Bank, as well as smaller lenders Building Societies.

Government Schemes

Help to buy

The Government’s help to buy scheme was launched in April 2013 and is designed to help those who cannot afford a deposit of more than 5% get onto the property ladder.  Since its launch, it has already helped hundreds of thousands of people move into new build properties.

Working with a wide range of new build developers, we have helped many of their clients utilise the help to buy scheme since its inception.  Our team’s knowledge of the market means that we are ideally placed to provide advice and guidance on this and other schemes available on the market to help first-time buyers

How does the equity loan scheme work?

If you’re a first-time buyer looking to purchase a new build property but are unable to afford a deposit larger than 5%, you may be eligible for the help to buy equity loan scheme.  On the condition that the purchaser contributes a deposit of at least 5%, the Government will lend 20% of the purchase price as a loan. This loan is interest-free for 5 years.

You will then need a mortgage for the remaining 75% of the property, at this loan to value it gives access to more competitive interest rates. 

Once you reach the sixth year of your loan, you will start paying interest at 1.75% on the government’s 20% loan – this rate will go up each year by any increase in the Retail Price Index (RPI) plus 1%.

The loan can be repaid in full at any time.  However, it must be paid off in full after 25 years, or if you move house.  Those living in London qualify for further support, with the Government granting an equity loan of up to 40% of the value of the property.