Your Money
The most important financial transaction of your life — here is what it actually involves.
Figures reflect UK data as of 2026. Always verify specifics before making financial decisions.
Most people buy their first home in their late 20s or early 30s. Understanding how the system works at 18 means you are building towards it from the start — not scrambling to understand mortgages, deposits, and stamp duty at the moment you need to make a decision worth hundreds of thousands of pounds.
Do not expect to buy at 18. Do expect to be ready to buy by your late 20s — if you start building now. The steps that set you up: building a credit score, saving consistently, opening a Lifetime ISA, and avoiding large debts that would reduce the mortgage amount a lender will offer you.
Lenders typically offer mortgages of 4–4.5× your annual income. On a £35,000 salary, that is approximately £140,000–£157,500. On a joint income of £70,000, it is £280,000–£315,000. In most UK cities outside London, that is enough to buy.
A mortgage is a loan secured against a property. You borrow money from a bank or building society, pay it back monthly over 25–35 years, and own the home outright at the end. If you miss payments, the lender can repossess the property. This is why affordability matters — you need to be confident you can make payments even if interest rates rise or your income temporarily falls.
Your monthly payment is made up of two parts: interest (the cost of borrowing) and capital repayment (paying off the loan itself). In a repayment mortgage, both are included. In the early years, most of the payment is interest. Over time, the split shifts toward capital as the outstanding balance reduces.
Deposits are typically 5–20% of the property value. The higher your deposit, the lower your loan-to-value (LTV) ratio, and the better interest rate you will be offered.
Repayment vs interest-only: on a repayment mortgage (the standard for residential buyers), you pay off both interest and capital each month and own the property outright at the end. Interest-only mortgages — where you pay only the interest and owe the full loan at the end — are rare for residential homes now and generally not suitable for first-time buyers.
Fixed rate vs tracker: a fixed-rate mortgage locks your interest rate for a set period (usually 2 or 5 years), giving certainty over your monthly payments. A tracker mortgage follows the Bank of England base rate — payments go up or down when the base rate changes. Fixed is usually the sensible choice for first-time buyers who need payment predictability.
Budget approximately £3,000–£8,000 in additional costs on top of your deposit, depending on the property price and which lenders and solicitors you use.
The Lifetime ISA (LISA) is one of the most valuable things available to you right now. If you are aged 18–39, you can open a LISA and save up to £4,000 per year. The government adds a 25% bonus — up to £1,000 per year, for free. You can use the LISA and its bonus towards buying your first home, provided the property is worth up to £450,000 (as of 2025).
Rules to know: you must have held the account for at least 12 months before using it. If you withdraw the money for any reason other than buying a first home or retirement after 60, you pay a 25% penalty — which effectively loses you money beyond just losing the bonus. Do not put money in a LISA unless you are confident it is for one of those two purposes.
The Help to Buy equity loan scheme closed to new applicants in October 2022. Do not plan around it. It no longer exists for first-time buyers.
Shared ownership lets you buy a share of a property — between 10% and 75% — and pay subsidised rent on the remainder, which is owned by a housing association. You need a smaller deposit (only on the share you buy), and over time you can purchase more of the property ("staircasing") until you own it outright. It is a genuine route to ownership for people who cannot yet afford to buy on the open market in their area.
The trade-off: you pay rent on the part you do not own, and there are service charges. Research the full monthly cost carefully before committing.
Open a Lifetime ISA today and save whatever you can. Build your credit score. Understand what salary and deposit you will need for the area you want to live in. The people who buy in their late 20s are the ones who started thinking about it at 18 — not the ones who panicked at 27.
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