Buying your first home? Here’s what you need to know!

Thinking about buying your first home? It’s one of the biggest moves you’ll ever make, but let’s be real-the property world loves using confusing words, random acronyms, and formal legal speak that makes zero sense when you’re just starting out.
At BRH, we believe in keeping things simple, transparent, and straight to the point. No gatekeeping, no hidden surprises, and definitely no confusing corporate jargon. Keep this as your straightforward guide to getting key-in-hand without losing your mind in the process.

 The Money Stuff Made Simple

What is a Mortgage?

A mortgage is simply a long-term loan specifically used to buy property. You pay a chunk of cash upfront (your deposit), and a bank or building society covers the rest. You then pay back that loan month by month over a set period (known as the mortgage term, which usually lasts between 25 to 40 years – depending on how much you borrow). You can choose to get a mortgage through banks like Nationwide and Natwest directly, or you can go to a specialist mortgage broker who will search for options on your behalf.
Note- You don’t have to choose the estate agents in-house mortgage broker (if they have one). You have complete freedom to choose your mortgage provider, no matter what you have been told. 

What is Loan-To-Value and Why Does it Matter?

Loan-to-Value, or LTV, sounds technical, but it’s just a ratio:

• If you buy a home for £150,000 and put down a £15,000 deposit (10%), you need a mortgage for £135,000 (90%).
• Your LTV is 90%.

The Rule of Thumb: The lower your LTV (meaning the bigger your deposit), the lower your interest rate will usually be because the bank takes less risk. Most first-time buyers aim for a 5% or 10% deposit to get started.

Fixed vs. Variable Interest Rates

Fixed Rate: Your monthly repayment stays exact to the penny for a set time (e.g., 2, 3, or 5 years). Super helpful for budgeting when you’re just getting started on the property ladder. You can choose your fixed rate at the time of applying, a long term fixed rate is great because you know exactly how much you’re paying, but there is the risk of interest rates going down and being stuck at a higher rate. 

Variable / Tracker Rate: Your monthly payment can go up or down depending on the Bank of England’s base rate changes.

Freehold vs. Leasehold: What’s the Difference?

When you’re scrolling through listings, you’ll see properties listed as either Freehold or Leasehold.

Freehold: You own the building and the land it sits on completely. This is standard for most detached and semi-detached houses.

Leasehold: You own the home for a fixed number of years (often 99 to 999 years), but someone else owns the land (the freeholder). This is common for flats and apartments.

Pro Tip: If you’re looking at a leasehold property, always check the lease length. Anything under 80–90 years may make getting a mortgage tricky.

Your Deposit

Saving up for a deposit can feel like the biggest mountain to climb, but breaking it down makes it much more manageable.

How Much Do You Actually Need? Usually, you’ll need a deposit of at least 5% to 10% of the property price. For a £250,000 home, that’s £12,500 (5%) to £25,000 (10%).

• Low-Deposit Mortgages: You might see 95% or even 100% mortgages that let you buy with very little saved. While these get you on the ladder faster, they often come with higher interest rates, meaning you pay more over time.
• The LTV Factor: Remember, the bigger your deposit, the lower your Loan-to-Value (LTV) ratio. A lower LTV usually unlocks more competitive interest rates from lenders.

Smart Ways to Save

• Set a Goal: Check property prices in areas you love to see what you’re aiming for, be realistic in what you want out of your first home.
• Automate It: Set up a standing order to transfer your savings the day after payday so you don’t accidentally spend it.
• Shop Around: Don’t just leave your savings in a standard account. Look for higher-interest accounts to help your money grow. Use comparison sites like MoneySavingExpert or MoneySuperMarket to find the best deals.

Government Help: The Lifetime ISA (LISA)

If you’re a first-time buyer under 40, a Lifetime ISA (LISA) is your best friend.

• The Bonus: You can put in up to £4,000 each tax year, and the government adds a 25% bonus. If you save £1,000, they add £250 for free.
• The Catch: You must use this money to buy your first home (or for retirement). If you withdraw it for other reasons, you’ll face a 25% government charge, which means you lose the bonus plus a bit of your own cash.

Always check what other government schemes, like Shared Ownership and local Rent to Buy schemes that might be available in your area to give you an extra helping hand.

Don’t Forget the “Hidden” Moving Costs

Your deposit isn’t the only money you’ll need upfront. Make sure your budget accounts for these essentials:

1. Solicitor / Conveyancing Fees: The legal expert who checks property contracts, conducts local authority searches, and handles money transfers. This often depends on the property value.
2. Property Survey: An independent check of the building’s physical condition to ensure there are no structural defects or unexpected repairs needed. There are multiple different levels of surveys you can get, choose which one is right for you depending on your mortgage conditions, property age and what renovation plans you may have.
3. Stamp Duty (SDLT): First-time buyers in England pay £0 Stamp Duty on homes priced up to £300,000. If the property is between £300,001 and £500,000, you only pay tax on the amount over £300k.
4. Moving Expenses & Setup: Van hire, Wi-Fi setup fees, and first-month council tax/utility bills
5. Appliances and Furniture: If you’re moving out of rented accommodation or your parents home, you might not have big appliances like fridge-freezers, washing machines etc. Make sure to set a little bit aside to purchase these items.
6. Decorating and Renovation: Making a house a home is the best part, but costs can spiral quickly. Be realistic about your budget and create a priority list during viewings so you aren’t shocked later.
   1. Quick Wins: Painting, changing fixtures, or new flooring. These are relatively affordable and can often be done the weekend you get your keys.
   2. Mid-Term Projects: Garden landscaping, bathroom revamps, or replastering. These can wait until you’ve settled in and saved up a bit more.
   3. Major Overhauls: Extensions, structural changes, or full-scale renovations. These require significant planning and budget so take your time to plan and save for these things.

Ready to Find Your First Home?

At BRH, we serve buyers, sellers, and renters across South Yorkshire and surrounding areas with total transparency. Whether you need advice on a listing or want to get alerts the moment a matching home hits the market, we are here to help. Speak to a member of the team today to get started.