The Question
I had hoped to start searching for my first home in 2026, but I have decided to hold off for a few months whilst I save a bit more deposit. In advance, I am looking at interest rates on offer.
Do first-time buyers generally pay higher rates for their mortgages and what rate is currently considered a ‘good deal’ for someone buying their first home? I have around 20% deposit to put down, so could benefit from some good deals – but will the fact it’s my first home penalise me when it comes to getting the best rate?
Darren’s Answer
Many first‑time buyers look at rates before they’re ready to buy so they know what’s realistic when they start house‑hunting.
The last thing you want to do is find your dream home and realise it is unaffordable.
Let’s look at your three questions in turn:
1. Do first‑time buyers pay higher rates?
The short answer is no. Lenders do not penalise you for being a first‑time buyer, if anything, they are actively trying to support first-time buyers.
Mortgage pricing is mainly based on:
Many mainstream lenders offer first‑time buyers the same core products as everyone else, sometimes with extra incentives (fee‑free deals, cashback, or flexible criteria) which is worth asking your broker about.
In practice, first‑time buyers often do very well on rates because they typically buy standard residential properties and hold repayment mortgages.
2. What is a good deal right now?
It is always difficult to mention specific rates given how frequently they can change.
Rates have been gradually drifting down since late 2025, with a spike in early 2026. This seems to have plateaued, and rates have started to come down again (at the time of writing). It’s true though that they’re still well above the ultra‑low levels of the early 2020s.
As mentioned above, lenders are trying to support first-time buyers and there are deals and incentives available. This will depend on when you apply for the mortgage but it’s worth keeping a close eye on what’s available.
3. Does a 20% deposit put you in a strong position?
Yes, a 20% deposit is very healthy and will access a range of lower rates than if you provided a 5% or 10% deposit.
80% LTV is one of the biggest rate drops and it unlocks more lenders, lower interest rates and crucially, improves affordability stress‑tests.
You are in a strong position and working towards your goal.
Be mortgage ready
Before you apply, it is important to ensure you keep your credit in check and do all you can to show you are a good borrower. For example, by:
- Avoiding new credit applications
- Keeping credit card balances low (even if cleared monthly)
- Remaining on the electoral roll
- Maintaining stable employment
- Keeping your deposit clearly traceable (savings history)
The first step on the journey is to speak to a mortgage broker who can provide a Decision in Principle (DIP), which is where lenders will check your affordability and credit history and let you know how much you can borrow.
A mortgage broker will review your specific circumstances and guide you through the full process.