Quick Summary: Your Home-Buying Journey at a Glance
Buying your first home is a big step, and it can sometimes feel overwhelming—especially in today’s cost of living crisis. But with the right approach, it’s possible to get on the property ladder without sacrificing your quality of life.
Key Steps to Buying Your First Home:
Sort Your Finances – Check your credit score, budget for a deposit, and understand how much you can afford.
Explore First-Time Buyer Support – Take advantage of government schemes like Lifetime ISAs, Shared Ownership, and the First Homes Scheme.
Find the Right Mortgage – Choose between fixed, variable, or tracker rates, and get a Mortgage in Principle before house hunting.
Pick the Right Property – Prioritise location, value for money, and long-term affordability over square footage.
Make an Offer & Do the Legal Work – Negotiate the price, hire a solicitor, and get all the property checks done (valuation, surveys and legal searches to ensure you are paying the right price and there are no hidden issues).
Secure Your Mortgage & Exchange Contracts – Finalise your mortgage, pay the deposit, and legally commit.
Completion & Moving In – Finalise the purchase, get your keys, and settle into your new home!
Now, let’s get into the details.
Introduction: Buying Your First Home Without Sacrificing Your Lifestyle
Let’s be real—buying your first home right now isn’t easy. House prices are high, mortgage rates are fluctuating, and everyday costs have sky rocketed. But that doesn’t mean home ownership is out of reach. With the right strategy, you can still buy a home that suits your needs without stretching yourself too thinly.
A key thing to remember is; a home should improve your quality of life, not consume it. It’s easy to get caught up with the idea that bigger is better, but that extra bedroom or larger kitchen isn’t worth it if it means you cannot afford holidays, meals out, or even just living in reasonable comfort.
Instead of maxing out your budget, focus on what matters most: location, affordability, and long-term security.
Step 1: Get Your Finances in Order
Check Your Credit Score
Your credit score will directly impact on the mortgage deals available to you, so before you even start looking at houses, it is worth checking your score with Experian, Equifax, or TransUnion, or register with Check My File for a combined report that includes all three of these credit agencies. If it’s lower than expected, don’t panic—improving it could be as simple as:
Repaying off small debts or credit card balances.
Ensuring all parties to the mortgage are on the electoral roll.
Avoiding unnecessary credit applications in the months before applying.
How Much Deposit Do You Need?
Most lenders require a deposit of at least 5%, but having 10% or more can unlock better mortgage deals for you.
An attractive way to save for a deposit would be to utilise your Lifetime ISAs (LISA) annual allowance, enabling you to save up to £4,000 per year in a tax-efficient environment, on top of which you will receive a 25% government bonus each year.
Please note:
The Lifetime ISA limit of £4,000 counts towards your annual ISA limit. This is £20,000 for the 2024 to 2025 tax year. An Individual Savings Account (ISA) is a government-backed savings or investment account allowing people in the UK to save or invest money without paying income or capital gains tax on their returns. "You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.
By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme, or personal pension scheme:
(i) you may lose the benefit of contributions from your employer (if any) to that scheme; and
(ii) your current and future entitlement to means tested benefits (if any) may be affected."
You can hold cash or stocks and shares in your Lifetime ISA or have a combination of both.
When you turn 50, you will not be able to pay into your Lifetime ISA or earn the 25% bonus. Your account will stay open and your savings will still earn interest or investment returns.
You can withdraw money from your ISA without penalty if you’re:
buying your first home
aged 60 or over
terminally ill, with less than 12 months to live
You’ll pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason (also known as making an unauthorised withdrawal).
Gifted Deposits – If you do not have sufficient saving but have family members who are able to assist, they are able to contribute tax-free towards your deposit.
What Can You Actually Afford?
Don’t just think about what a lender says you can afford—consider what will allow you to still enjoy your life. A mortgage should be manageable, not restrictive. A smaller, or less conveniently located home that allows for an annual holiday and a comfortable lifestyle might be better than a larger home or a prime location that drains you financially.
Step 2: Find the Right Mortgage & Government Support
First-Time Buyer Schemes to Know About
First Homes Scheme – which offer first-time buyers in England a 30%-50% discount on new-build homes. However, eligibility depends on your local council, and they may have additional criteria. Be sure to check with your local authority before applying. Find out more here.
Help to Buy Equity Loan – If buying a new build, borrow up to 20% interest-free for five years. - This is available in Wales only.
Shared Ownership – Buy part of a property (from 25%) and pay rent on the rest.
Stamp Duty Relief – First-time buyers pay no Stamp Duty on homes up to £425,000 (until 31/03/2025, from 01/04/2025 homes up to £300,000).
Bank Discounts for First-Time Buyers – Some banks offer incentives such as discounted interest rates or higher loan amounts for first-time buyers, making it easier to secure a mortgage.
Types of Mortgages
Choosing the right mortgage is key to keeping monthly payments manageable. Here’s a breakdown of the most common types:
Fixed-Rate Mortgage – Your interest rate is locked in for a set period (usually 2, 3, or 5 years), meaning your monthly payments stay the same, regardless of interest rate fluctuations. This type of mortgage is the most common and is ideal for those who prefer financial certainty enabling them to budget more effectively.
Tracker Mortgage – Directly follows the Bank of England’s base rate, meaning when the base rate drops, your mortgage payments will too. The downside is, if the base rate rises, your payments will follow.
Standard Variable Rate – This is the lender's own variable rate when no mortgage deal is taken, or the current deal has expired. Despite it's name, their is nothing standard about this rate, as it can vary considerably from lender to lender and tends to be adjusted when the Bank of England move the Base Rate, meaning your monthly payments could go up or down.
How a Bank of England Base Rate Cut Might Benefit You
When the Bank of England reduces the base rate, it is always great news for buyers considering Tracker Mortgages, as any reduction is contractually passed on to you and so reduces your monthly repayments.
Should you be considering a Fixed Rate Mortgage, changes to the base rate usually cause lenders to reprice the deals they have available, meaning if the rate is moved downwards, the lenders are more likely to reduced the rate on the deals available and you could lock-in at a lower rate.
For those still undecided on which mortgage type would suit best, it’s worth speaking to a mortgage intermediary to help determine which would be the most suitable deal for you, based on your circumstances, the lending environment and the prevailing lending environment. Tracker Mortgages may save you money or if you feel the Base Rate is on a downward trend, however a Fixed-Rate deal provides stability over a defined period, enabling your to budget more easily.
Step 3: House Hunting – Finding the Right Home for You
Bigger Isn’t Always Better
Many first-time buyers focus too much on square footage. Instead, ask yourself:
Is this home affordable enough for me to still enjoy my life?
Is the location convenient for my work, my family, and any necessary amenities?
Is the home energy-efficient (to keep bills lower)?
What is the applicable Council Tax banding
Step 4: Making an Offer & The Legal Process
Once you find “the one,” it’s time to make an offer, so here’s how to ensure you negotiate the best deal:
Check the area for similar properties and what they have sold for on Zoopla, or the Rightmove House Prices tool.
Check out the immediate neighbourhood and environment for any noise issues.
Do not be afraid to negotiate and haggle– sellers often expect this!
Make your offer subject to a property survey.
Step 5: Exchange Contracts & Move In
Exchange of Contracts: The Legal Commitment
At this stage, you’ll:
Pay your deposit (typically 5-10%).
Agree on a completion date.
Important: Once contracts are exchanged, you’re legally committed to the purchase.
Final Thoughts: Your Home, Your Lifestyle
Buying your first home is an exciting milestone, but it should work for your lifestyle—not consume it. A more affordable home in a great location will give you freedom, while an overstretched mortgage can make life unnecessarily stressful.
Next Steps: Speak to a Keystone Financial Adviser
Navigating mortgages, deposits, and government schemes can be tricky. Our expert advisers at Keystone Wealth Management can guide you every step of the way.
Get in touch today and take the first step towards homeownership.