Buying your first home and getting onto the property ladder is undoubtedly exciting, but it can be overwhelming, especially in today’s market. However, there are many schemes and government incentives to help you make that first step Here’s our handy guide to first-time buyer mortgages, and why it’s crucial to consider more than just the mortgage rate.

First things first, how much of a deposit do I need to buy a house?

Before you get to the fun part (browsing for that dream property), you could consider saving for a deposit. Generally, a lot of people try to save at least 5% to 20% of the cost of the home that they’d like. For example, if a person is looking at homes costing around £150,000, it would potentially aim to save at least £7,500. The more you have for a deposit, the wider the range of cheaper mortgages available.

This is due to loan to value. Loan to value refers to the amount you are borrowing in relation to the value of the property. Having a higher deposit means you’ll borrow less of the capital, and the less you borrow, lenders possibly offer you a lower interest rate.

What about other costs?

In addition to your monthly mortgage payments, there are other potential costs involved when it comes to buying a home. These could include:

• Survey costs

• Solicitor’s fees

• Removal costs

• Buildings insurance

• Initial furnishing and decorating costs

• Mortgage arrangement and valuation fees

• Stamp Duty

• Life Insurance

• Insurance Protection

• Other protections

As a first-time buyer, one of the most important thing to consider is whether you can really afford to take the plunge into becoming a homeowner.

There are now strict checks in place if you apply for a mortgage, and the lender will check that you can afford the mortgage, and be able to cope if your circumstances were to change.

It’s crucial to remember that you shouldn't go into this unprepared. If you miss a mortgage payment, you risk your home being repossessed.

Which type of mortgage is right for me?

There are two main types of mortgage: Fixed rate mortgage - As the name suggests, your mortgage repayments will be the same for a fixed period of time - generally two to five years.

Variable mortgage (tracker mortgage) - The amount you pay could increase or decrease, in line with the Bank of England base rate.

Many people consider their circumstances as well as the current economic climate when deciding between the two. If you are risk-averse, the security of a fixed rate mortgage is could suit more than a variable mortgage rate. This could help a borrower to know how to pay every month.

So, how come the lowest rate isn’t always the best option?

While low rates are obviously desirable, the rate is not the only factor to take into consideration. The length of your mortgage deal makes a difference, as you will likely be switched back onto the lender’s SVR (standard variable rate) once your mortgage term ends. Therefore, factor in that rate, as well as the rate and term of the mortgage deal offered.

Some people make note of the lender’s fees when looking at a mortgage deal. There are a number of fees to potentially take into account. Here are just a few:

• Arrangement fee - This is the fee for the mortgage product, and is sometimes known as the product fee. This can be anything from £0 to over £2,000

• Booking fee - This is sometimes charged when you simply apply for a mortgage, and is not usually refundable even if your mortgage falls through. It typically costs around £99-£250.

• Early repayment charge - This might not always apply, but a lot of buyers check what the rules are, especially if they wish to make an early repayment down the line. This is typically 1-5% of the mortgage balance during your fixed-rate period.

• Exit fees - This is the fee you’ll possibly need to pay your lender when you repay your mortgage, even when you’re not repaying it early. This is typically £75-£300.

What’s more, the lowest possible interest rates are potentially only available to borrowers who can afford large deposits. Typically you’ll need a 40% LTV to possibly be eligible for one of the lowest rates.

So, what now?

Some first-time buyers speak to a mortgage consultant before making any decisions. Your first mortgage is a huge step, so it’s wise to speaking with an expert. You may then have a better chance to understand your own circumstances fully, as well as the options available to you.

Once you have gone through all of the details with a mortgage consultant, you may feel far happier and more confident about finding the right first-time mortgage for you.

Eddison Wells is a mortgage brokerage - with a wealth of knowledge, their team are able to advise on a comprehensive range of financial products. Providing the highest quality service at the most affordable price is a prerequisite and a firm ethos. If you’re thinking of taking your first mortgage, call an Eddison Wells Financial Mortgage Adviser on 0800 808 9981 - a member of their team will be willing to help, and provide advice based on your own circumstance.