Your solicitor or conveyancer will manage the legal work involved in buying your home. There may also be charges for searches and other associated legal costs.
Understanding what you can afford
A practical guide to deposits, mortgages and the costs of buying your first home
When you are thinking about buying your first home, understanding your budget can help everything else begin to feel a little clearer.
It is not simply about the price of a home or how much you may be able to borrow. Your deposit, monthly mortgage payments, everyday living costs and the additional costs of buying all play a part.
Taking some time to look at the whole picture can help you explore homes with a budget that feels comfortable for you.
Start with your deposit
Your deposit is the amount you contribute towards the price of your home, with a mortgage usually covering the remainder.
Some mortgages are available with a deposit from 5% of the purchase price, although the amount you need will depend on your individual circumstances and the mortgage products available to you.
For example, on a £300,000 home:
5% deposit: £15,000
10% deposit: £30,000
A larger deposit means you will need to borrow less and may give you access to a wider choice of mortgage products. However, there is no single deposit amount that will be right for everyone.
Understand much could you borrow
The amount you may be able to borrow will depend on your individual financial circumstances.
Mortgage lenders will usually consider factors such as:
- your income
- regular spending
- existing financial commitments
- credit history
- the size of your deposit.
An independent mortgage adviser can help you understand this in more detail and explain the mortgage options that may be available to you.
Get a rough idea of what you could afford
If you are still working out what your budget might look like, Rightmove's mortgage affordability calculator can give you an initial estimate based on details including your income, deposit and preferred mortgage term.
It can also provide an indication of what your monthly mortgage repayments could look like.
Try the Rightmove mortgage calculator
The calculator provides an estimate only. The amount you may be able to borrow will depend on your individual circumstances and the lender's criteria.
What is an Agreement in Principle?
An Agreement in Principle, sometimes called a Mortgage in Principle, gives you an indication of how much a lender may be prepared to lend based on some initial information about your finances.
It is not a formal mortgage offer, but it can help you understand your potential price range before you begin seriously looking for a home.
Plan for the additional costs of buying
Your deposit is likely to be the largest upfront cost, but there are other expenses to allow for when buying and moving into your first home.
Depending on your chosen mortgage, there may be arrangement, product, valuation or adviser fees. The costs that apply will vary between mortgages and lenders.
If you are buying your first home in England, you may be eligible for First-Time Buyers' Relief.
Eligible first-time buyers purchasing a property for £300,000 or less currently pay no Stamp Duty Land Tax. For eligible purchases above £300,000 and up to £500,000, 5% is payable on the portion above £300,000.
If the property costs more than £500,000, First-Time Buyers' Relief does not apply.
Tax rules and individual circumstances can change, so always check the latest government guidance when you are preparing to buy.
It is worth allowing for the practical costs of moving too. These could include removals, furniture and the smaller things you may need when setting up your first home.