UK Mortgage Guide for First-Time Buyers 2026
Everything a UK first-time buyer needs to know about mortgages in 2026 — eligibility, deposit requirements, stamp duty relief, and monthly cost.
Buying your first home in the UK is one of the biggest financial decisions you will make. This guide walks through everything you need to know about mortgages in 2026 — from deposit requirements to stamp duty relief and how to estimate your monthly payments.
How Much Can You Borrow?
Most UK mortgage lenders use an income multiple of 4–4.5× your annual income. So if you earn £45,000 a year, you could typically borrow £180,000–£202,500. Joint applicants use the combined income. Lenders also stress-test affordability at higher rates.
Deposit Requirements in 2026
- 5% deposit — available through the Mortgage Guarantee Scheme (extended to 2026)
- 10% deposit — broader lender choice, better rates
- 20%+ deposit — best rates, no LMI (Lender Mortgage Insurance)
Stamp Duty for First-Time Buyers
As of April 2026, first-time buyer stamp duty relief applies as follows:
| Property Value | Stamp Duty |
|---|---|
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% on portion above £300k |
| Above £500,000 | Standard rates apply (no FTB relief) |
Types of Mortgages
- Fixed rate — your monthly payment stays the same for 2, 5, or 10 years. Predictable, but you could miss out if rates fall.
- Tracker rate — follows the Bank of England base rate plus a margin. Payments fluctuate monthly.
- Discount rate — set below the lender's Standard Variable Rate (SVR) for an introductory period.
Monthly Cost Example
Property: £350,000. Deposit: £35,000 (10%). Mortgage: £315,000. Rate: 4.3% fixed for 5 years. Term: 25 years.
Monthly repayment ≈ £1,710 (capital + interest). Total repaid over 25 years ≈ £513,000.
Government Schemes for First-Time Buyers (2026)
- Lifetime ISA (LISA) — save up to £4,000/year, government adds 25% bonus (up to £1,000/year). Must buy a property under £450,000.
- Mortgage Guarantee Scheme — allows 5% deposit on homes up to £600,000.
- Shared Ownership — buy 25–75% of a property and pay rent on the rest, then "staircase" to full ownership.
Getting Mortgage-Ready
- Check your credit report (Experian, Equifax, TransUnion — all free)
- Close unused credit cards and pay off any outstanding balances
- Avoid applying for new credit in the 6 months before your mortgage application
- Save your deposit in a LISA or Help-to-Buy ISA if eligible
- Get an Agreement in Principle (AIP) before house-hunting
Estimate your exact monthly payments with our UK Mortgage Calculator.