If you’ve spent an evening flicking between mortgage comparison websites and ended up with more questions than answers, you’re not alone. This is one of the most common experiences first-time buyers describe when they come to us. The numbers look similar on the surface, and yet somehow each one feels like a different puzzle.
The truth is, choosing the “right” mortgage loan as a first-time buyer is about more than finding the lowest interest rate. You also need to consider factors such as arrangement fees, the length of the initial deal and early repayment charges. A mortgage that looks cheaper at first can cost you more overall once everything else is taken into account.
This article will cover how to compare first-time buyer mortgages properly, the key factors to consider, and how a mortgage adviser can help find the right deal for you.
Are you a first-time buyer in London? For mortgage advice based on your personal circumstances, please contact Bennison Brown for a quick response.
How to compare first-time buyer mortgages properly
There are six key details that make mortgage comparisons appear complex. They are:
1. Interest rate
This is the headline figure that draws most attention, and rightly so, but it’s only part of the picture. A mortgage with a lower rate might carry a higher arrangement fee that wipes out the savings.
2. Fixed periods
Most lenders offer fixed-rate mortgages between 1 and10 years. During that time, your rate (and therefore your monthly repayment) stays the same regardless of what happens to the Bank of England’s base rate.
3. Mortgage term
This is the total length of your mortgage. Most commonly, 25 years, but in recent years, 30, 35 or even 40 years have become common, especially for first-time buyers in higher-priced areas.
A longer term reduces your monthly repayment, but you will end up paying more interest overall. A shorter term costs more each month but means you own your home outright sooner and could pay significantly less interest overall.
4. Monthly mortgage repayments
This is what you will pay back each month based on the mortgage rate, your term, and the size of your loan. To ensure you can afford the monthly mortgage payment, lenders stress-test your affordability at a higher rate than the one you’re applying for. It’s important to make sure you can still manage if rates increase.
Remember to factor in the other costs of home ownership when deciding how much you can afford each month, such as Council Tax, utilities, broadband, contents insurance and buildings insurance (required from when you exchange contracts). Leasehold properties may also come with service charges and ground rent.
5. Total amount repayable
This is the true cost of the mortgage from day one to the final payment. It includes your loan plus all the interest you’ll pay over the full term.
This figure can look alarming, but it’s the most honest comparison between two mortgages over their lifetime. A mortgage with a lower monthly payment but a longer term will most likely have a higher total repayable figure.
6. Fees
Many mortgages come with an arrangement fee, sometimes called a product fee. This is often between £1,000 and £2,000, although the exact amount depends on the lender and mortgage deal.
The fee is usually payable when you apply or when your mortgage completes. Many lenders will also let you add it to the mortgage instead of paying it upfront. This can make the initial cost easier to manage, but you’ll then pay interest on the fee for as long as it remains part of the loan.
Some fee-free mortgages have a slightly higher interest rate, while mortgages with a fee may offer a lower rate. The best option depends partly on how much you’re borrowing. A lower rate could save enough on a larger mortgage to justify the fee, but on a smaller mortgage, the fee may cost more than you save.
When you’re trying to compare all six of these simultaneously across dozens of products, it can be difficult it is to know which option is best. This is exactly where a trusted mortgage broker earns their place.
Things to consider when applying for a first-time buyer mortgage
Here is Bennison Brown’s round-up of what you need to think about before applying for a mortgage.
Your income and affordability
Mortgage lenders decide what they’re prepared to lend you based primarily on your income, debts and outgoings.
The standard approach is an income multiple, most commonly 4x to 4.5x your gross annual income, though some lenders will go to 5x or 5.5x in certain circumstances. Though this typically requires a higher income, strong credit profile, and a deposit of at least 10%. Certain deals even allow up to six times your salary depending on the borrower’s circumstances, with the aim of helping first-time buyers to get on the ladder”
But lenders don’t just look at what you earn; they also look at what you spend. They’ll review your bank statements for regular commitments like car finance, credit card payments, student loans, and subscriptions, all of which reduce your disposable income.
They will also check your credit file for historic and current issues. Reducing unnecessary credit commitments before you apply can meaningfully increase your borrowing power.
Your deposit and loan-to-value (LTV)
Your deposit determines your LTV ratio, which is the percentage of the property’s value covered by the mortgage. For example, a £20,000 deposit on a £200,000 home gives you a 90% LTV mortgage.
Deposits for first-time buyer mortgages typically start at around 5% of the property’s value, although putting down 10% or more can give you access to a wider choice of deals and potentially lower interest rates.
Even a relatively small increase in your deposit could make a difference if it moves you into a lower LTV band, such as from 95% to 90% or from 90% to 85%.
Some buyers choose to wait and save a larger deposit to reduce the amount they need to borrow and improve their LTV ratio. A Lifetime ISA can also help eligible first-time buyers build their deposit through a government bonus.
Costs involved when buying a home
Remember, it is important not to use every penny you have for the deposit. You will still need money for all the costs involved in buying your first home, including:
Stamp Duty Land Tax (SDLT): First-time buyers in England pay no SDLT on the first £300,000 of a purchase price, and 5% on the portion between £300,001 and £500,000. Above £500,001, standard rates apply.
Solicitor and conveyancing fees: Legal fees are typically £1,500–£3,000 plus VAT, plus disbursements such as local authority searches and Land Registry fees.
Survey: This is different to your lender’s valuation. A HomeBuyer Report (Level 2) may cost around £400–£800 and is suitable for most modern properties. A full Building Survey (Level 3) may cost £700–£1,500+ and is worth considering for older or unusual properties.
Mortgage arrangement fee: Many mortgage products carry a fee of £500–£1,999. This can often be added to the loan, though that increases your total interest.
Moving costs: A local move typically costs £800–£2,500. Book early, particularly if you’re moving on a Friday.
In total, plan for approximately £5,000–£10,000 in additional costs beyond your deposit, depending on purchase price, property type, and whether Stamp Duty applies to your purchase.
Fixed-rate vs variable-rate mortgages
This is often the decision first-time buyers find most difficult, and understandably so.
A fixed-rate mortgage locks your interest rate for an agreed period of time, typically two, three, five, or ten years.
A variable-rate mortgage can move up or down with the Bank of England base rate.
| Factor | Fixed Rate | Variable / Tracker Rate |
| Interest rate | Locked for the fixed term | Can rise or fall at any time |
| Monthly payments | Identical each month and easier to budget | Can change, sometimes with little notice |
| Early repayment | Usually an early repayment charge (ERC) applies | Typically more flexible and often have lower or no ERCs |
| Best suited for | Buyers who want certainty and predictability | Buyers with flexibility to absorb rate changes |
| Risk level | Low, with no surprise increases | Higher, where payments can rise if rates go up |
| Typical term options | 1, 2, 3, 5, 7 or 10 years | No fixed term and moves with base rate |
For most first-time buyers, a fixed-rate mortgage offers the reassurance of knowing exactly what you’ll pay each month. That said, the right choice genuinely depends on your personal situation, your financial resilience, and the current rate environment. Your mortgage adviser will explain the trade-offs clearly and help you decide.
Monthly repayments
Your monthly mortgage repayment is determined by the size of your loan, the interest rate, and the mortgage term. Change any one of these, and your repayment changes.
On a standard repayment mortgage, each monthly payment contains two components: a portion that repays the capital (the loan itself) and a portion that covers the interest. In the early years of a mortgage, the split is weighted heavily towards interest. Over time, as the loan reduces, more of each payment goes towards the capital.
On an interest-only mortgage, you’re not actually paying down the loan at all. You’ll owe exactly the same amount at the end as you borrowed at the start.
A worked example
On a £250,000 repayment mortgage at 4.5% over 25 years, your monthly repayment would be approximately £1,389. Extend the term to 30 years and the monthly repayment reduces to around £1,267, a saving of £122 per month. However, over 30 years you’d pay approximately £35,000 more in total interest than over 25 years. That trade-off is worth understanding clearly before you choose your term.
Mortgage terms
The mortgage term is the total length of time over which you repay the loan. Traditionally, 25 years was the standard, but in recent years, particularly in higher-priced markets like London, 30, 35 and 40-year terms have become increasingly common as buyers look to reduce monthly payments to an affordable level.
Choosing a longer term is not inherently wrong; it’s a practical response to higher property prices and stretched affordability. But it’s important to go in with clear eyes about the trade-offs:
- A 35-year term on a £300,000 mortgage at 4.5% means paying considerably more in interest than a 25-year term, potentially £60,000–£80,000 more over the full period.
- The longer the term, the slower you build equity, which matters when it comes to remortgaging or selling.
- Mortgage terms must typically end before you reach age 70 or 75, depending on the lender. This caps the maximum term available to older first-time buyers.
One strategy worth discussing with your adviser is starting on a longer term to keep payments affordable now, then overpaying when your income allows, or shortening the term when you remortgage at the end of the fixed period. This gives you flexibility without locking you into unnecessarily high monthly commitments from day one.
How working with a mortgage adviser can help you find the right mortgage deal as a first-time buyer
Comparison websites are useful for getting a rough idea of the market, but they’re limited in what they can do. They show you headline rates, but they can’t account for the subtleties of lender criteria that determine whether your application is likely to be accepted and on what terms.
A whole-of-market mortgage adviser, like the team at Bennison Brown, works differently. Here’s what that actually means in practice:
1. Secure an Agreement in Principle (AIP)
An Agreement in Principle (AIP) is a conditional statement that the lender is prepared to offer you a mortgage up to a certain amount (subject to full application and valuation).
You’ll need this for house hunting, to show sellers and estate agents that you are a serious buyer. Also, with an AIP in place, you can move quickly when you find the right property, rather than losing days (or the property) while paperwork catches up.
2. Tailored recommendations to your situation
We won’t just search for the lowest rate. We’ll recommend lenders and products that suit your specific circumstances, including your income, employment status, deposit size, credit history, the property you’re buying, and your long-term goals.
3. Matching you with the right lender
Every lender has its own underwriting criteria, which are not always published. For example, some lenders are more flexible with self-employed income. Some will accept higher loan-to-value ratios. Some have a more generous approach to buyers with an old CCJ (County Court Judgement). Some will lend at 5.5x income for certain professionals.
With our extensive market knowledge, we can match you with the right lender to increase your chances of a successful application.
4. Application support
In a competitive property market, speed matters. A slow or disorganised mortgage application can be the difference between securing a property purchase and losing out to another buyer. We treat every application with the urgency it deserves.
We’ll manage the application process from start to finish. We know exactly what documents lenders require and how to present your details most effectively. We’ll respond to underwriter queries quickly to avoid delays.
We’ll keep you informed throughout the entire mortgage process, so you always know where things stand: from offer and application, through to liaising with lenders, agents and solicitors, right up to the mortgage agreement and completion.
Buying your first home with Bennison Brown mortgage brokers
At Bennison Brown, our qualified mortgage advisers have access to the whole mortgage market. This means we’re not tied to any single lender, panel, or product range. We will recommend the type of mortgage that genuinely suits your situation, not just the one that looks best on a headline comparison.
We work with first-time buyers across London and across the UK every day. We understand the challenges of the home-buying process and the confusion that comes with comparing dozens of mortgage options. Our job is to cut through the noise, give you clear and honest guidance, and make sure you take the first step on the property ladder with complete confidence.
A chat with us comes with no obligation. Whether you’re just exploring what’s possible or ready to apply, we’d love to help. Get in touch with the Bennison Brown team today and let’s talk about buying your first home.