A Simple Guide to a Mortgage for First time Buyers

Buying a home is one of the biggest financial decisions you'll ever make, but understanding mortgages can feel overwhelming - especially for first-time buyers. If you've ever nodded along while someone talks about "fixed mortgage rates" and "LTV" without actually understanding a word, don't worry - you’re not alone.

This guide will break down everything about mortgages, what you need to get one, and how to improve your chances of approval, all in a way that actually makes sense.

 

What Is a Mortgage?

A mortgage is essentially a big loan from a bank or lender to help you buy a home. Unlike a personal loan, where you might borrow a few thousand pounds, a mortgage is usually hundreds of thousands, and rather than paying it back in a few years, it's stretched out over 25 to 40 years.

The catch? Your home is the lender's safety net. If you stop making payments, they can repossess your property. But let’s not dwell on worst-case scenarios. With the right financial habits, getting a mortgage is entirely achievable.

 

How Much Can You Borrow?

This depends on several factors, but lenders typically let you borrow 4 to 4.5 times your annual salary, or in some cases, up to 5.5 times your income if you work in a high-earning profession.

For example:

• If you earn £30,000 per year, you might be able to borrow £135,000.

• If you earn £50,000 per year, your potential mortgage could be around £225,000.

But it’s not just about income. Lenders will also check:

• Your deposit - The bigger the deposit, the better the mortgage rates.

• Your credit score - A good score means lower interest rates.

• Your spending habits - Excessive debt, Buy Now Pay Later schemes, and payday loans can affect your eligibility.

• Your job security - Permanent contracts are preferred over freelancing, but self-employed mortgages do exist.

How Klink Can Help: Klink’s mortgage readiness tool scans your spending habits using Open Banking and highlights potential red flags before you apply for a mortgage.

 

How Much Deposit Do You Need?

Most first-time buyer mortgages require at least 5% of the property price as a deposit. However, a larger deposit gets you better mortgage rates.

 

Deposit	Loan-to-Value (LTV)	Impact
5% (£10k on a £200k home)	95% LTV	Higher interest rates, fewer deals
10% (£20k on a £200k home)	90% LTV	More choice, lower interest
20%+ (£40k on a £200k home)	80% LTV	Better deals, lower monthly payments

 

How Klink Can Help: The app’s Home Goal feature creates a personalised savings plan, showing how long it will take to reach your target deposit while offering spending insights to save more.

 

Types of Mortgages

Understanding different mortgage types can save you thousands over the years:

• Fixed-Rate Mortgage - Your interest stays the same for 2, 3, 5, or even 10 years. Great for budgeting, but can be pricier.

• Tracker Mortgage - Follows the Bank of England’s base rate, meaning payments may rise or fall.

• Discounted Variable Mortgage - Offers lower initial rates but fluctuates over time.

• Interest-Only Mortgage - You only pay interest each month, then repay the full amount at the end. Riskier for first-time buyers.

Most first-time buyers choose fixed-rate mortgages for stability, but it’s important to compare deals.

 

Should You Use a Mortgage Broker?

A mortgage broker can help you find the best mortgage deal by comparing offers from multiple lenders. They have access to exclusive deals that may not be available to the public and can guide you through the application process, making things easier if you're unsure where to start. Some brokers charge a fee, while others earn commission from lenders, so it's worth checking before you proceed.

 

How to Improve Your Mortgage Approval Chances

Lenders assess more than just your income. To boost your chances of securing a first-time buyer mortgage, follow these steps:

• Check your credit score - Aim for 700+ for the best mortgage rates (use free services like Experian or ClearScore).

• Reduce unnecessary spending - Too many takeaways or subscription services can be a concern.

• Reduce debt - Credit card debt or overdrafts could lower your borrowing power.

• Avoid payday loans – These are a red flag for lenders.

• Don’t apply for credit right before a mortgage - Every application leaves a footprint on your credit report.

How Klink Can Help: Klink’s spending insights help you cut unnecessary expenses and improve your mortgage readiness through smart financial planning.

 

How Long Does a Mortgage Application Take?

The mortgage application process can take anywhere from two to six weeks, depending on the lender and your financial situation. A straightforward application with good credit and a stable income may be approved quickly, while more complex cases could take longer. To speed up the process, have these documents ready:

• Proof of income (payslips or tax returns for self-employed applicants)

• Bank statements from the last 3-6 months

• Proof of deposit

• Credit report

• Identification (passport or driving licence)

 

The Mortgage Process in a Nutshell

1. Save your deposit - A larger deposit means better mortgage rates.
2. Check your credit score - Fix any financial issues early.
3. Get a Mortgage in Principle (MIP) - A lender’s estimate of how much you could borrow.
4. Find a property - Once you make an offer, things move quickly.
5. Apply for a mortgage - Your lender does affordability checks.
6. Valuation and surveys - The bank ensures the home is worth the loan amount.
7. Mortgage offer issued - If all checks are good, your mortgage is approved.
8. Exchange contracts and complete - The home is officially yours!

Click here for a step-by-step guide on the mortgage application process.

 

Ready to Get Mortgage-Ready?

Getting a first-time buyer mortgage doesn’t have to be complicated. With proper financial planning, you can secure the best mortgage rates and step into homeownership with confidence.

Download Klink today to track your savings, get spending insights, and improve your chances of mortgage approval. Your future home is closer than you think!