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Homebuyer Guide

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The Complete UK Homebuyer Guide (2025)

Buying a home is one of the biggest financial decisions most people will ever make — but navigating the UK mortgage market can be confusing, especially with changing interest rates, lender criteria and new government schemes.

This guide breaks down everything you need to know as a buyer in 2025, covering deposits, affordability, documentation, mortgage types and the full step-by-step process.

At NexGen Finance, our role is to provide clear information and introduce you to FCA-authorised advisers who can recommend suitable mortgage products based on your circumstances.

1. How Much Deposit Do You Need?

Your deposit influences which lenders you can access and what interest rates you qualify for.

  • 5% deposit – Minimum required for most first-time buyer products.
  • 10% deposit – Wider choice, lower rates.
  • 15%–20% deposit – Best rates, reduced monthly payments.

Your deposit + your income determine your borrowing power. A larger deposit gives more flexibility and stronger affordability outcomes.

2. How Much Can You Borrow?

Most lenders calculate borrowing using a multiple of your income — but this varies based on your credit profile, debts and monthly outgoings.

Typical lending multiples in 2025:

  • 4× income – Standard
  • 4.49× income – If affordability is strong
  • 5× income – Limited cases, good credit & strong income

Lenders also assess credit card balances, car finance, BNPL (Klarna, Clearpay, etc.), childcare costs, and pension contributions.

3. Types of Mortgages Explained

  • Fixed-Rate Mortgages: Your interest rate stays the same for the chosen term (2, 3, 5 or 10 years). Ideal for budgeting.
  • Tracker Mortgages: The rate moves in line with the Bank of England base rate.
  • Variable & Discounted Variable: Rates can move up or down depending on the lender’s internal rate.
  • Offset Mortgages: Use your savings to reduce your interest.

4. Understanding Loan-to-Value (LTV)

LTV is your mortgage amount divided by the value of the property.

  • 95% LTV – 5% deposit
  • 90% LTV – 10% deposit
  • 75% LTV – Common for remortgages or larger deposits

Lower LTV = lower risk to lenders = better rates.

5. Fees and Costs Buyers Often Forget

  • Solicitor fees and searches
  • Survey or valuation report
  • Product fee (sometimes worth paying for a lower rate)
  • Stamp duty (if applicable)
  • Moving costs

6. The Full Step-by-Step Buying Process

  1. Initial Budgeting: Check deposit, income, and credit profile.
  2. Agreement in Principle (AIP): A soft-check from a lender showing how much you can borrow.
  3. Viewings & Offers: Estate agents take your offer more seriously with an AIP.
  4. Full Mortgage Application: Submit payslips, bank statements, and ID.
  5. Valuation: Lender checks the property value.
  6. Mortgage Offer: Formal offer issued to you and your solicitor.
  7. Conveyancing: Legal checks and contracts.
  8. Exchange & Completion: Contracts are exchanged and you receive the keys.

7. What Documents Do You Need?

  • Proof of ID and Address
  • 3 months’ bank statements and payslips
  • P60 (if applicable)
  • For self-employed: SA302s, Tax Year Overviews or company accounts.

8. Common Issues Buyers Face in 2025

  • Credit Issues: Missed payments or high utilisation can limit options.
  • Affordability Tightening: Lenders are more cautious with spending patterns and BNPL.
  • Property Condition: Issues like damp or structural problems may require extra checks.

9. Government Schemes & Support (2025)

  • 95% mortgages – Available with participating lenders.
  • Shared ownership – Buy part-rent part-own.
  • First Homes scheme – Discounted new-builds for local buyers.
  • Deposit assistance – Family help via gifted deposits.

10. Should You Use a Mortgage Adviser?

Mortgage advisers have access to lenders you cannot go to directly and can simplify complex affordability cases. NexGen Finance works as an introducer and connects you with authorised advisers who can recommend suitable products.

Thinking About Buying in 2025?

Whether you’re a first-time buyer, home mover or looking to remortgage, we can help you understand your options clearly and connect you with fully regulated advisers.

Contact NexGen Finance for clear, straightforward guidance tailored to your plans.

Mortgage Calculator for Buyers and Homeowners

Using a mortgage calculator is a smart way to understand your potential monthly payments before making any big decisions. Our calculator is designed to give you a clear idea of what your repayments could look like based on your loan amount, term, and interest rate.

Ready to get started? Visit our Mortgage Calculator page now and take the first step in your journey.

All mortgage advice is provided by FCA-regulated advisers. Your home may be repossessed if you do not keep up repayments on your mortgage.

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