Buying your first home? Here are the costs you can expect
It’s not just mortgage costs you need to budget for when you buy your first home – but survey, conveyancing and moving costs too.
Key takeaways
Monthly mortgage payments vary depending on the amount borrowed, mortgage term and the interest rate
Mortgage fees need to be taken into account when calculating the affordability of a particular mortgage
First-time buyers need to pay stamp duty on properties costing more than £300,000
Buyers also need to pay for surveys, conveyancing and moving costs
How much does a first-time buyer need for a deposit?
A first-time buyer usually needs a deposit between 5% and 25% of the price of the property. You get cheaper mortgage interest rates with higher deposits.
With the cost of the average UK home now at around £268,000 (according to Land Registry figures for February 2025), you’d need to save nearly £27,000 if you wanted to buy with a deposit of 10%.
The higher your deposit, the lower your monthly interest payments are likely to be. To access the cheapest mortgage deals, you’ll need a deposit of 25% or more.
Once you have built up equity in your home, the cheapest mortgage deals are available to borrowers with a loan-to-value (LTV) of 60% or less. For more stats, check out our dedicated first-time buyers statistics page.
Our figures show that the typical first-time buyer put down a deposit of £75,072 in 2025.
How much will monthly repayments be for a first-time buyer mortgage?
The typical monthly mortgage payment for a first-time buyer is determined by:
How much you borrow
The duration of the loan term
The interest rate you are charged
Clearly, the more you borrow, the more you will need to repay. However, your monthly payments will be lower if you have a longer mortgage term.
But a longer mortgage term will mean paying interest on the debt for longer – and paying more in interest overall.
Our latest data highlights that the average mortgage term agreed by a first-time buyer stands at 29 years and 1 month in 2025.
The other main factor affecting your repayments is how much interest you are charged. Most mortgages are arranged on a repayment basis, which means your monthly payment consists of repaying interest on the money you have borrowed and some of the capital.
When you get to the end of the term, your final payment clears the debt, and you will own your home outright.
With an interest-only mortgage your monthly payments only covered the interest on the debt, meaning they will be lower than for a repayment mortgage. However, at the end of the mortgage term, you will still owe the amount you originally borrowed.
The idea with an interest-only deal is that the buyer puts money into an investment plan timed to mature when the mortgage term comes to an end and be sufficient to repay the mortgage debt.
However, the past few years have seen tighter rules for interest-only mortgages and they are rarely offered to first-time buyers now. Landlords tend to take out interest-only mortgages – then sell the property at the end of the term.
How do mortgage interest rates work?
There are various types of interest rates on mortgages:
Fixed rate
With a fixed-rate mortgage, the interest rate remains the same throughout the entire deal period. This is typically two to five years, although it is possible to get 10-year fixed rates too.
Variable rate
If you have a variable rate mortgage the lender can adjust it up or down according to economic circumstances, such as changes in the Bank of England’s base rate.
Tracker
A tracker mortgage is a variable-rate mortgage that tracks the Bank of England base rate as it moves up and down. So, if the base rate changes, your mortgage rate will change too. You can monitor how base rate changes will affect your mortgage repayments by using our base rate calculator.
Capped
A capped mortgage is a variable rate that will not rise beyond a specified level.
Discounted variable rate
A discounted variable-rate mortgage tracks the mortgage lender’s standard variable rate. This means that, if the SVR goes up or down, so does your mortgage interest rate.
Even if the Bank of England base rate remains the same, your mortgage could become more expensive if your lender decides to increase its SVR.
Most buyers opt for fixed-rate mortgages as this means you will know for sure how much your payments will be for a set period of time.
However, at the end of the fixed rate you will be automatically moved onto your lender’s variable rate. This is likely to be more expensive – so most borrowers remortgage at this point.
When you obtain a mortgage quote on MoneySuperMarket, you can see details of the total cost of the loan over its term, with the fees included.
How much are mortgage fees?
When you take out a mortgage, you may also have to pay various fees. It’s important to take these into account when assessing how affordable a mortgage is, or comparing one mortgage with another.
Some mortgages are advertised as “fee free” – but these often come with higher interest rates.
Here are the main mortgage fees to consider:
Arrangement fee
A mortgage arrangement fee is usually a flat sum from £200 up to £2,000. A handful of mortgages, usually buy-to-let mortgages, charge a percentage arrangement fee.
An arrangement fee is what you pay for the mortgage product itself. You’ll usually be given the option of adding the arrangement fee to your mortgage.
While this means you can avoid an up-front cost, it will increase your overall payments, as you will pay interest on it for the duration of your mortgage.
Booking fee
Some lenders combine booking and arrangement fees, whereas others charge them separately. If it is an additional fee, it’ll usually be between £50 and £300.
A booking fee is for the cost of applying for the mortgage. With many lenders, this is not refundable. This means that, even if you decide not to go through with the mortgage, you’ll still have to pay the booking fee.
Valuation fee
Valuation fees are normally somewhere between £100 and £1,000. The valuation fee is for when the mortgage provider assesses the value of your property to make sure it’s worth the amount it’s going to lend you.
CHAPS
A CHAPS (Clearing House Automated Payment System) covers the cost of your mortgage provider sending funds to your solicitor. It’s usually about £50.
Mortgage account fee
You may also have to pay for the administration costs for your mortgage lender to run your account. This generally costs up to £300.
Mortgage broker fee
If you use a mortgage broker to arrange your mortgage, they should explain their fees to you. Some brokers charge flat fees of about £200 or so, while others are fee-free and get paid commission by the lender instead.
Legal fees
You might also have to pay for the mortgage lender’s legal costs. This is usually between £500 and £1,500. This can also include the cost of the Land Registry fee.
Other home moving costs
It's important to factor in additional moving costs into your budget, including:
Survey fees
It’s advisable to get a survey or homebuyer’s report when you buy a property. Depending on how detailed it is, the cost could be anywhere up to £1,000.
It covers the property value, as well as any potential issues you might face, such as structural problems or planning problems. For more information, read our guide on how to choose the right survey.
Conveyancing
Conveyancing fees are normally from about £400 to £1,500. ‘Conveyancing’ refers to the legal process of transferring ownership of a property or piece of land from the seller to the buyer.
Stamp duty
Stamp duty is the tax you pay on property and land transactions, which can be as high as 12%.
For first-time buyers, there is no stamp duty to pay on properties worth up to £300,000.
For properties worth £300,001 or more, for the first £300,000, the stamp duty rate is 0%; and from £300,001 to £500,000, the rate is 5%.
If your home costs more than £500,000, then you’ll pay the same amount as someone who has bought property before, as per the table below:
Property value | SDLT rate |
|---|---|
Up to £125,000 | Zero |
The next £125,000 (the portion from £125,001 to £250,000) | 2% |
The next £675,000 (the portion from £250,001 to £925,000) | 5% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
The remaining amount (the portion above £1.5 million) | 12% |
From Gov.uk correct 28/4/2025 Note this only applies to first-time buyers in England and Northern Ireland. The rules are different for Scotland and Wales.
How much will the moving process cost?
The total cost of moving depends on how much stuff you need to move and on how far you’re going. If you use a professional removals firm, it could cost anywhere from £250 for a local move for a one-bed flat, to more than £1,000 for a long-distance move.
How much does home insurance cost?
Most lenders require you to have building insurance as part of the mortgage agreement. However, there is no obligation to buy this from your mortgage lender.
It’s a good idea to buy contents insurance as well. The cost can vary depending on the level of cover you want, as well as where your home is located. To find out more, read our guide to insuring your first home.
What are the costs of owning your home?
Once you have purchased your new home, there are numerous bills you need to pay. These include:
Utility bills: Gas and electricity, water, broadband and pay TV
Council tax: This will depend on which band your property is in and where you live
Maintenance: The cost of repairs and improvements
Compare mortgages to find a better deal
If you’re looking to take out your first mortgage, you can find a better deal by comparing options with MoneySuperMarket. All you need to do is tell us a little about how much you want to borrow, as well as the value of the property you’re buying, and how you want to pay the mortgage back.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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