Housing

Complete Guide for First-Time Buyers in 2026: From Saving to Keys

April 2026 · 9 min read · QuidCast Guides

⚠️ Not financial advice. This guide is educational only. Investments can fall as well as rise. Always consult an FCA-authorised adviser before making financial decisions.

Quick answer

Buying a first home means working out affordability (lenders typically allow 4–4.5x income), building a deposit (5% minimum, 10%+ for better rates), and using tools like the Lifetime ISA for a 25% government bonus. Keeping total housing costs below 35% of take-home pay keeps it sustainable.

Buying your first home is the biggest financial decision most people ever make. This guide breaks the journey into manageable steps.

Step 1: Work Out What You Can Afford

Lenders typically allow 4–4.5x your annual income. On a £40,000 salary, you could borrow £160,000–£180,000. With a 10% deposit, that means buying up to ~£200,000. But keep total housing costs below 35% of your take-home pay.

Step 2: Build Your Deposit

Minimum 5% deposit for most mortgages. A 10% deposit unlocks better rates. 15–25% gives the best deals.

Lifetime ISA (LISA)

Under 40? Save up to £4,000/year and get a 25% government bonus — up to £1,000 free per year. Must be used for a first home under £450,000 or retirement.

Key TakeawayOn a £250,000 property, saving a 10% deposit (£25,000) instead of 5% (£12,500) can save hundreds per month in mortgage repayments — the extra saving is almost always worth it.

Step 3: Get a Mortgage in Principle

Get an MIP before making offers. It shows estate agents you're serious and gives you a clear budget.

Step 4: Know the Additional Costs

Stamp Duty: First-time buyers pay no SDLT on properties up to £425,000 (until threshold reverts)
Solicitor fees: £1,000–£2,500
Survey: £400–£1,500
Mortgage arrangement fee: £999–£1,999
Moving costs: £300–£2,000+

✦ Try the QuidCast Tool

Mortgage Calculator

Work out your monthly payment for any purchase price, deposit, rate and term.

🏠 Calculate Your Mortgage →

Frequently asked questions

How much can a first-time buyer borrow?

Lenders typically lend around 4–4.5x your annual income. On a £40,000 salary that is roughly £160,000–£180,000, allowing a purchase up to about £200,000 with a 10% deposit — provided total housing costs stay below about 35% of take-home pay.

How big a deposit do first-time buyers need?

The minimum is usually 5% of the price, but a 10% deposit unlocks noticeably better rates, and 15–25% gets the best deals. A larger deposit can save hundreds a month in repayments.

What is a Lifetime ISA for first-time buyers?

If you are under 40, a Lifetime ISA lets you save up to £4,000 a year and receive a 25% government bonus — up to £1,000 free annually — toward a first home under £450,000, or retirement from age 60.