How much deposit is required for first time buyers?
Finding a deposit is the biggest hurdle for first time buyers. You'll generally need to have saved at least 5% of the price you're paying for your new home before you can apply for a mortgage. For a house worth £150,000, that means saving £7,500 just for the minimum deposit.
If you're able to save more and can afford a bigger deposit, you'll probably get a better mortgage deal.
If you're struggling to save enough for a deposit, there are both Government schemes, discounts offered by home builders, and deals designed by banks and building societies to help you get on the property ladder.
What other mortgage costs are there when buying a home?
While finding your deposit is the biggest hurdle, there are other expenses that will crop up throughout your home buying journey. These include stamp duty, legal fees, and moving costs. Keep scrolling to find out what you’ll need to pay before you get the keys to your first home.
How much is Stamp Duty for first time buyers?
First time buyers in England and Northern Ireland will pay 0% on their first home purchase up to the value of £300,000, and 5% Stamp Duty tax on any amount between £300,001 - £500,000 when the deal goes through.
For example, if you buy a property for £400,000, you’d pay 0% on the first £300,000, then 5% on the amount above £300,000 – or £5,000 – in Stamp Duty tax.
If you’re buying a property in Scotland, you'll pay Land and Buildings Transaction Tax (LBTT) rather than Stamp Duty. First time buyers in Scotland benefit from relief through an increased nil rate band of LBTT up to £175,000.
If you’re buying a property in Wales, under the Welsh government’s Land Transaction Tax (LTT), which replaced Stamp Duty in 2018, there is no LTT to pay for all buyers purchasing homes costing up to £225,000.
For a more in-depth look at Stamp Duty and how to calculate how much you might have to pay, pop over to Stamp Duty calculator page for a quick and easy answer.
Mortgage arrangement and product fees
Banks and building societies will generally charge a fee to lock in a specific mortgage deal (especially lower fixed or tracker rates). This is typically called an arrangement, product, or application fee. Some lenders will let you add this to the overall cost of your mortgage, whereas others will want it paid when you apply for your mortgage.
Valuation fees
The bank or building society who are lending you the money for your home needs to know that it’s actually worth as much as you’ve said it is. This valuation is for the benefit of the bank and won’t look at structural issues. For that, you’ll have to pay…
Property survey fees
Getting a property survey can help to protect you from buying a house with hidden problems. Things like structural issues, dry rot or roof damage can end up costing you thousands later down the line. An independent RICS (Royal Institution of Chartered Surveyors) home survey can give you piece of mind and help you decide whether to go through with the purchase.
Legal and conveyancing fees
A solicitor or licensed conveyancer will handle the legal transfer of ownership. Costs will cover the time that the solicitor spends executing the legal work, checking contracts, and processing the transfer.
Local authority and legal searches
Your solicitor will need to do a series of mandatory searches with local authorities, water companies, and environmental agencies to make sure there are no hidden surprises (such as planned highways, local flood risks, or mining history beneath the property).
Land Registry fee
This is paid to the UK Land Registry to officially register you as the new legal owner of the property.
Moving and Immediate Costs
Once you’ve exchanged contracts and completion day is set, the final costs come down to physically moving your life into the new home.
Removal costs
If you are moving from a small flat, a hired van and a few friends might suffice. For larger family homes, professional removals are essential.
Electronic Transfer Fee (CHAPS)
Your lender or solicitor will charge a fee to securely transfer the large sums of mortgage money between financial institutions on completion day.
Immediate home insurance
You’re legally responsible for the building from the exact moment you exchange contracts, not the day you move in. You must have a buildings insurance policy live and active on exchange day, otherwise, you are breaching your mortgage terms and running the risk of having your mortgage pulled.
