The Federal Housing Administration (FHA) loan is a popular government-backed mortgage in the United States, designed to help first-time buyers and those with lower credit scores secure a home with a small deposit. However, the UK does not have FHA loansโbut there are several UK-specific schemes and mortgage options to help first-time buyers get on the property ladder.
Key UK Schemes for First-Time Buyers
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Discounted New-Builds: Buy a newly built or previously purchased First Home for 30% to 50% less than market value. The home must be your main residence.
Eligibility: Must be a first-time buyer over 18, able to get a mortgage for at least half the price, and not earning more than ยฃ80,000 (ยฃ90,000 in London). Local authorities may set additional criteria such as priority for key workers or local residents.
Limitations: Only available in England, and income limits apply. The property cannot be used as a buy-to-let or second home.
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How it works: Buy a share (10%โ75%) of a property and pay reduced rent on the rest to a housing association. You can purchase more shares later (โstaircasingโ) as your finances improve.
Eligibility: Household income must be ยฃ80,000 or less (ยฃ90,000 or less in London) and be a first-time buyer or unable to afford a suitable home otherwise.
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5% Deposit Option: Government-backed scheme where lenders offer 95% mortgages to buyers with deposits as low as 5%. Properties up to ยฃ600,000 are eligible.
Availability: Open to both first-time buyers and current homeowners (subject to extension by government).
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Government Bonus: Save up to ยฃ4,000 a year; the government adds a 25% bonus (up to ยฃ1,000 a year), usable towards a first home valued up to ยฃ450,000.
Eligibility: Must be aged 18โ39 and a first-time buyer.
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Fixed-Rate Mortgages: Lock in your interest rate for 2-5 years, for predictable payments.
Tracker Mortgages: Variable rate linked to Bank of England base rate.
Standard Variable Rate Mortgages: Interest rate can rise or fall at the lenderโs discretion.
Youโll typically need at least a 5% deposit. Many UK banksโsuch as Barclays, Lloyds, NatWest, HSBC, and Santanderโoffer specific mortgage products for first-time buyers, including guidance and tools to estimate how much you can borrow.
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Stamp Duty Relief: In England and Northern Ireland, no Stamp Duty Land Tax on homes costing up to ยฃ425,000 for first-time buyers; sliding scale up to ยฃ625,000.
Local Schemes: Some councils offer additional support for specific groupsโcheck with local authorities.
Quick Steps to Applying
Review government-backed schemes and check eligibility.
Calculate your deposit and potential mortgage borrowing.
Apply for a mortgage agreement-in-principle to know your budget.
Compare first-time buyer mortgage options.
Make a formal mortgage application once youโve had an offer accepted.
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First Homes Scheme: https://www.gov.uk/first-homes-scheme
Affordable Home Ownership Schemes: https://www.gov.uk/affordable-home-ownership-schemes
Barclays First-Time Buyers: https://www.barclays.co.uk/mortgages/first-time-buyers/
Nationwide First-Time Buyer Mortgages: https://www.nationwide.co.uk/mortgages/first-time-buyers
Lifetime ISA (MoneyHelper): https://www.moneyhelper.org.uk/en/homes/buying-a-home/government-schemes-for-first-time-home-buyers-and-existing-homeowners