How to use this first-time buyer calculator
- Property price: the price of the home you're looking at.
- Your deposit: the savings you'll put towards it.
- Your income and second applicant: gross yearly salaries before tax. Leave the second at 0 if you're buying alone.
- Interest rate: an example rate to try. Rates change often and depend on your deposit and the lender, so try a few.
- Mortgage term: many first-time buyers choose 25 to 35 years.
You'll see the monthly payment, your loan-to-value, the Stamp Duty you'd pay with first-time buyer relief, a rough borrowing estimate from your income, the cash you'll need upfront and a table of deposits at 5%, 10% and 15%.
How the numbers are worked out
Worked example
With a 5% deposit of £12,500 the payment would be £1,203.38; with 15% (£37,500) it would fall to £1,076.71. A bigger deposit lowers the payment and often unlocks a better rate too, which the calculator doesn't assume.
How much can I borrow?
Lenders work out how much to lend from your income and your outgoings. A common starting point is a multiple of income, and many lenders offer somewhere around 4 to 4.5 times gross income, sometimes more for certain applicants. That's why this calculator shows a range at 4 and 4.5 times your combined income.
Treat the range as a rough guide, not a promise. Each lender has its own rules and runs an affordability check that looks at your spending, debts, credit history and whether you could still pay if rates went up. An agreement in principle from a lender, or advice from a mortgage broker, gives you a much better idea of what you can borrow before you start making offers.
Stamp Duty relief for first-time buyers
In England and Northern Ireland, first-time buyers get relief on Stamp Duty Land Tax:
| Price of the home | Stamp Duty for a first-time buyer |
|---|---|
| Up to £300,000 | £0 |
| £300,001 to £500,000 | 5% of the part above £300,000 |
| Over £500,000 | No relief: normal rates on the whole price |
For example, a couple buying their first home for £350,000 would pay 5% of £50,000 = £2,500, compared with £7,500 for a home mover. To qualify, everyone buying must be a first-time buyer and the home must be their main residence.
Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax) have their own property taxes and rules, so the Stamp Duty figure here applies only to England and Northern Ireland.
Saving for a deposit
The deposit is often the hardest part. Some ideas that can help:
- Set a target from the table. The 5%, 10% and 15% amounts give you clear goals, and the payments show what each one means month to month.
- Automate your saving. A standing order on payday makes saving the default. Our savings goal calculator shows how much to put away each month to hit a target by a date.
- Look at government-backed savings accounts. A Lifetime ISA can add a government bonus to savings for a first home, within limits. Check the current rules on gov.uk, because there are conditions and penalties for some withdrawals.
- Check your credit file. Correcting mistakes and keeping up with existing payments helps when you apply.
Choosing a mortgage term
A longer term lowers the monthly payment but increases the total interest. In the example above, a 30-year term keeps the payment manageable, but you'd pay about £185,416 of interest. Many people take a longer term to start with and overpay later if their income rises, as long as the mortgage allows overpayments without charges.
Fixed or variable rate?
Many first-time buyers choose a fixed rate for two or five years so their payment can't change during that time, which makes budgeting easier. A tracker or variable rate can be cheaper at times but can rise. When a fixed rate ends, you usually move to the lender's standard variable rate unless you remortgage, so it's worth reviewing your deal before it finishes.
What this calculator doesn't include
The results don't include mortgage fees, solicitor costs, surveys, insurance, service charges or ground rent, and they assume one fixed rate for the whole term. The borrowing estimate is a simple income multiple, not a lender's decision. Stamp Duty is for a main home in England or Northern Ireland, without surcharges. Use the numbers to plan, then confirm the details with a lender or a qualified mortgage adviser.