First-Time Buyer Affordability Guide (UK)
Getting onto the property ladder is exciting but can feel overwhelming. This guide explains the key affordability checks UK first-time buyers face and shows how to use the HouseBudget Calculator to translate your income, debts and deposit into a realistic price range.
How much deposit do you need?
Many lenders accept a 5–10% deposit for first-time buyers, though larger deposits can unlock better rates and lower monthly payments. Factor in legal fees, surveys and moving costs alongside your deposit savings.
Income multiples and monthly payments
Lenders often cap borrowing around 4–4.5x annual income, but they also check that the monthly payment fits your budget. The calculator lets you compare both: set a comfortable percentage of take-home pay for housing, then see how that stacks against an income-multiple cap.
Account for existing debts
Car finance, credit cards and personal loans reduce what you can safely commit to a mortgage. Enter your monthly debts into the HouseBudget Calculator so it can subtract them before suggesting a housing budget.
Choosing an interest rate and term
Your chosen interest rate and term directly affect affordability. A lower rate or longer term can reduce payments, but a longer term increases total interest. Experiment with both in the calculator to see how payments and borrowing limits change.
Practical steps for first-time buyers
- Enter your take-home income, debts, deposit, rate and term into the HouseBudget Calculator.
- Pick a target percentage of income for housing, often around 30%, and view the suggested monthly payment.
- Check the estimated mortgage amount and property price, then compare with a 4–4.5x income multiple to see which constraint is tighter.
- Adjust the rate, term or deposit to bring the result into a comfortable range.
- Sense-check the stress-rate payment to ensure you could cope if rates rise.
FAQs
Can I get help with my deposit?
Some buyers receive gifted deposits from family or use savings schemes such as the Lifetime ISA. Check lender rules on gifted funds and be ready to provide evidence of where the money came from.
What if my credit score isn’t perfect?
A lower credit score can limit the lenders and rates available. Reducing debts and paying bills on time in the months before applying can improve your options.
Should I fix for two or five years?
Shorter fixes can offer flexibility if you expect to move or rates to fall, while longer fixes give payment certainty. Build the chosen rate into the calculator to see how it affects affordability.