Most lenders use the same affordability assessments, whether you are a first-time buyer or taking out a mortgage to buy a new home.
The cap is usually based on three or four times your salary, although it can be as high as five or six times in the right circumstances.
There are also several different schemes to make it easier for first-time buyers to get onto the property ladders, such as Help to Buy.
Help to Buy offers an equity loan at zero-interest for the first five years, where you can borrow up to 20% of the value of a new-build property, using a 5% deposit to create a 25% total down payment.
That means needing a 75% mortgage, for a new-build up to £600,000 in value. There aren't any fees to pay on the equity loan, although if you don't repay it in the first five years - or refinance - then interest starts at 1.75% in year six and increases each year after that.
Your Help to Buy equity loan is a stake in the property, so if the home has increased in value by the time you pay it back, the amount you need to buy out the share will also increase. For example, if you buy a property for £100,000 and have a £20,000 loan from the government, then sell it for £120,000, you'll need to repay £24,000 in total since that is how much the 20% stake is now worth.
2023-05-09 
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