First-Time Buyer Mortgage Lenders

If you’re a first-time buyer, finding the best mortgage lender can sometimes feel overwhelming with so many options available. Here we’ll cover how first-time buyers can find the right lender for their needs. We’ll also explain the difference between mainstream and specialist lenders for a first home purchase.

Do all lenders offer first-time buyer mortgages?

Most UK mortgage lenders will offer home loans to first-time buyers (FTBs), depending on your financial circumstances and whether you meet their eligibility criteria. However, not all will be flexible or offer specific mortgage products and perks tailored to FTBs.

It’s always worth exploring all your possible options as a first-time buyer because certain lenders offer incentives such as low deposit requirements, cashback deals, waiving of product fees or access to schemes and support. Also, only some lenders accept FTBs who are self-employed, have complex incomes or bad credit.

Best high street lenders for first-time buyers

High street lenders tend to be a popular with first-time buyers because they are usually well-known banks and brands. However, this doesn’t necessarily make them the best lenders for you.

Here are some examples of mainstream lenders that tend to cater some mortgages and benefits towards the needs of first-time buyers:

1. Nationwide

The reason Nationwide Building Society is often considered one of the best high street lenders for first-time buyers is because it offers 95% loan-to-value (LTV) mortgages, which means you’d need just a 5% deposit.

Currently, it also offers £500 cashback and access to specific FTB products like its ‘Helping Hand mortgage’ that allows you to borrow up to 33% more with a 5 or 10-year fixed rate mortgage. However, you won’t qualify for this product if you’re self-employed or using a scheme like shared ownership or Right to Buy.

2. Halifax

Along with 95% LTV mortgages for first-time buyers, Halifax offers unique products and benefits for FTBs. For example, you might qualify for its ‘First Time Buyer Boost mortgage’ allowing you to borrow up to 22% more than you normally could.

However, you’d need a 10% deposit, not be self-employed, and have a household income of at least £50,000. Halifax also offers a ‘Family Boost mortgage’ if you’re struggling to save a deposit, allowing your family to put 10% of the property price into a 3-year fixed-term savings account as security instead.

If you keep up with your repayments, your family will get their savings back after three years (plus interest). Halifax also supports all the major government schemes, such as mortgage guarantee, First Homes, Forces Help to Buy, Right to Buy, Help to Buy ISA and Help to Buy Equity Loans.

3. NatWest

NatWest offers 95% LTV mortgages, meaning potentially just a 5% deposit for first-time buyers. There’s also the option to use a gifted mortgage deposit if that suits your situation. With NatWest, you can access cashback mortgages with £150 to £750, but you need a 10% deposit.

There are also ‘green mortgages,’ which offer a discounted rate if you buy an energy-efficient home (Energy Performance Certificate rating of A or B). NatWest also supports schemes like the Help to Buy Equity Loan, shared ownership, and the mortgage guarantee scheme.

4. HSBC

As a first-time buyer, borrowing from HSBC can lead to some useful benefits like access to fee saver mortgages (that have no booking fee and come with a free standard valuation).

HSBC also offers the option to select a 40-year term, which will reduce your monthly repayment amount - although it will likely mean more interest paid over the life of the mortgage.

5. Santander

With Santander, it’s possible to get a mortgage with a 5% deposit as a first-time buyer. The bank also allows gifted deposits from family if they want to help, and offer free standard valuations.

It also supports access to government schemes like shared ownership, Forces Help to Buy, and Help to Buy ISAs (although you might need to explore Help to Buy alternatives). Santander has plenty of resources to help educate FTBs and you can get an online decision in principle (DIP) relatively quickly.

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Specialist lenders for first-time buyers

There are plenty of instances when it's best to approach a specialist lender. If your circumstances aren’t straightforward - perhaps you’re self-employed, have bad credit or complex income - you may need a more flexible, specialist mortgage lender.

Here are some examples of specialist mortgage lenders that can cater towards first-time buyers with more complex personal circumstances:

1. Aldermore

If you’re self-employed or happen to have bad credit - Aldermore can be a useful lender to approach as a first-time buyer, particularly if you’re self-employed or have adverse credit. You won’t be able to go direct, but a mortgage broker can arrange an introduction if they think Aldermore is suitable.

Aldermore can be flexible and assess your application individually. If you’re self-employed, they can use the highest combination of salary and dividends or salary and share of net profit to assess your income and affordability.

Also, if you’re a self-employed contractor, they can also consider your affordability on an employed gross income basis. With adverse credit, it depends on the specifics but Aldermore will consider applicants with past CCJs, missed payments, and those on a debt management plan (DMP) - amongst other types of bad credit.

2. Kensington

Kensington Mortgages can be flexible with their criteria, which means it can be adapted to your finances if you happen to receive irregular income (like bonuses and commission or overtime). If you work within certain professions (dentists, doctors, accountants and others), Kensington also offers professional mortgages.

These come with perks like lower rates or the ability to borrow up to 6 times your salary (compared to the standard 4.5 times salary multiple). Kensington also has ‘Mortgages for Heroes’, meaning NHS workers, teachers, firefighters, police, and military personnel can borrow 5 times their salary (with overtime taken into account).

Kensington also accepts applicants with more than one source of income, and if you’re buying a new build - they will allow house builder’s deposits of up to 5%. There are also other perks like £500 cashback with its Green eKo Reward mortgage and a ‘Flexi Fixed for Term’ to fix your monthly payment for between 11 to 40 years.

3. Together

For first-time buyers, Together offers some helpful specialist features. This includes gifted deposits and gifted equity of up to 75% of the property’s value, the ability to have up to four applicants, and they’ll accept automated valuations.

Together can be flexible with applicants (including those who are self-employed) and it supports schemes like shared ownership and Right to Buy. However, the minimum deposit for a first-time buyer mortgage with Together needs to be at least 25% of the property’s value - meaning a 75% LTV or lower.

Together is open to considering first-time applicants with low credit scores or no credit history (and other types of adverse credit). They will also consider applicants with up to 3 payday loans that have been settled in the last 12 months.

4. Vida Homeloans

For first-time buyers, Vida Homeloans caters to a variety of situations. For example, if you’re self-employed with less than 2 years of accounts, they might allow 1 year of accounts if you have a projection for the current year from an accountant (or 3 months of business bank statements).

They also let you use 100% of specific income types like investment income, foster care income, second jobs, child tax credit or child benefit. Or, up to 75% of overtime or commission. And, up to 50% of other benefits like disability living allowance (DLA), carer’s allowance, personal independence payment (PIP) and others.

Whether you’ve got bad credit (or an improving credit history), complex income, a low income of at least £15,00, a second job, or need a longer term of up to 45 years - Vida Homeloans might have a first-time buyer mortgage that suits your needs.

5. The Mortgage Lender

The Mortgage Lender can be flexible with particular types of first-time buyers. For example, they will consider applicants on a debt management plan or those who’ve used payday loans across a variety of timeframes.

They will even consider offering a 90% LTV loan for applicants who’ve experienced bankruptcy or had an Individual Voluntary Arrangement (IVA) - providing there’s evidence of discharge.

There is plenty of room for flexibility for first-time buyers in a range of complex situations, including bad credit, low or complex incomes and even those who have been self-employed for at least 12 months.

How to find the right lender for your first-time buyer mortgage

As a first-time buyer, using a mortgage broker means you can find the best deal with mainstream lenders or be introduced to the right specialist lender if your circumstances require it.

Some lenders won’t let you go to them directly and require an introduction from trusted brokers like Teito. Using a mortgage broker takes away the challenge and stress of finding the best lender for your needs as a first-time buyer.

Here are just some of the benefits of choosing Teito for your first-time buyer mortgage:

• Access to the whole market, including exclusive deals

• The option to compare the latest FTB rates for free

• Expert advice from highly rated, specialist brokers

• Secure a mortgage in principle in minutes

Ready to compare the latest deals and take advantage of a free, no-obligation chat with a broker who specialises in first-time buyer mortgages? Get started here.