The deposit is only the biggest bill in buying a first home, not the only one. You should also budget for Stamp Duty (often nil for first-time buyers), legal fees, a valuation or survey, mortgage fees, insurance and the cost of moving, plus a cushion for the first few months of ownership. A sensible rule is to list every cost before you make an offer, so that the figure you save towards is the full cash needed on completion day, not just the deposit.
Note: this is general information, not financial or legal advice. Figures in the worked examples come from our calculators and are estimates. Fees vary a great deal between firms and areas, so use real quotes for your own budget and check official guidance on GOV.UK.
The big picture: what you need in cash
Think of first-time buyer costs in four groups. Some are paid before you find a home, some when you exchange contracts, some on completion day, and some in the weeks after you get the keys.
| Stage | Typical costs |
|---|---|
| Before you offer | Mortgage in principle, possibly a broker fee, a little time off work for viewings |
| After your offer is accepted | Valuation and survey, legal fees to start, local searches |
| Exchange and completion | Deposit, Stamp Duty or its Scottish and Welsh equivalents, mortgage arrangement fee, final legal bills |
| After you move in | Removals, buildings and contents insurance, repairs, furnishing, a first service charge or ground rent if it is a leasehold flat |
The sum can surprise people. A buyer who has saved a 10% deposit and nothing else will find the rest of the bills hard to meet, even when no Stamp Duty is due. Put the total in a spreadsheet, keep it updated as quotes arrive, and decide how much spare cash you want to hold after completion. Many buyers aim to keep at least a few months of normal outgoings in reserve, because a boiler or roof repair is much harder to handle when your savings have just gone into the house.
The deposit and how it shapes everything else
The deposit is a share of the purchase price you pay from your own money, with a mortgage covering the rest. Lenders quote loan-to-value (LTV): a 10% deposit means a 90% LTV mortgage. A bigger deposit usually opens up cheaper deals because the lender is taking less risk.
Take a home at £280,000 as the running example in this guide:
- 5% deposit: £14,000, borrowing £266,000
- 10% deposit: £28,000, borrowing £252,000
- 15% deposit: £42,000, borrowing £238,000
With a 10% deposit, a £252,000 repayment mortgage at 4.5% over 25 years costs £1,400.70 a month, and about £168,209 of interest over the full term. At 5.5% on the same loan the payment rises to £1,547.50 a month. Those rates are only examples to show the sensitivity, not current offers, so ask a broker or lender for live quotes. How mortgage repayments are calculated explains the formula behind the monthly payment, and the savings calculator can show how long a deposit target takes.
Remember that the deposit itself comes with a requirement to show where it came from. Lenders and solicitors check that the money is yours or a genuine gift, so keep statements for the last few months and be ready to explain any large payments in.
Stamp Duty, LBTT and Land Transaction Tax
The tax on buying a home depends on where it is. In England and Northern Ireland it is Stamp Duty Land Tax (SDLT), in Scotland it is Land and Buildings Transaction Tax (LBTT), and in Wales it is Land Transaction Tax (LTT). First-time buyers get relief in England, Northern Ireland and Scotland, but not in Wales.
The rates built into our calculator for a first-time buyer are:
- England and Northern Ireland: 0% up to £300,000, then 5% on the slice from £300,001 to £500,000. If the price is over £500,000 there is no relief and the standard rates apply to the whole price.
- Scotland: a first-time buyer nil-rate band up to £175,000, then the standard LBTT bands (2% to £250,000, 5% to £325,000, 10% to £750,000, 12% above).
- Wales: no first-time buyer relief. Standard LTT bands apply, starting at 0% to £225,000, then 6% to £400,000.
Here is the same first-time buyer paying for different prices in England, using the House of Calculator engine:
| Price | SDLT as a first-time buyer | SDLT as a home mover |
|---|---|---|
| £280,000 | £0 | £4,000 |
| £350,000 | £2,500 | £7,500 |
| £400,000 | £5,000 | £10,000 |
| £500,000 | £10,000 | £15,000 |
| £520,000 | £16,000 | £16,000 |
The cliff edge at £500,000 matters. A £500,000 purchase costs £10,000 with relief, but a £520,000 one costs £16,000, because the relief disappears completely over the threshold. That is £6,000 extra for £20,000 more on the price. If you are negotiating near the line, the tax is part of the real price.
For the £280,000 example, an English first-time buyer pays nothing, a Scottish buyer pays £3,000 in LBTT, and a Welsh buyer pays £3,300 in LTT. Our Stamp Duty, LBTT and LTT explained guide sets out the full band tables, including the extra charges on second homes. Rates and thresholds change, so check GOV.UK, Revenue Scotland or the Welsh Revenue Authority before you commit.
Legal fees, searches and conveyancing
Almost every purchase needs a solicitor or licensed conveyancer. They check the title, raise questions with the seller’s side, arrange local authority and environmental searches, register you as the owner, and handle the money on completion day. In Scotland the process runs through solicitors and different paperwork, but the cost categories are similar.
A legal quote usually has several lines:
- Legal fee: the firm’s own charge, sometimes a fixed fee, sometimes with extras.
- Disbursements: costs paid to third parties, such as searches, Land Registry fees and bank transfer charges.
- VAT: on the firm’s fee and on some disbursements.
- Extras for leasehold: a lease review and notices to the freeholder, which can add to the bill.
Ask for a written breakdown, ask what happens to the fee if the sale falls through, and ask whether the quote covers Stamp Duty paperwork. Cheapest is not always best. A slow or unresponsive firm can lose you the property, so look at reviews and how quickly the firm answers your first email.
Surveys, valuations and the mortgage
The lender will arrange a valuation to check the home is worth the loan. This is for the lender’s protection, not yours, so it is not a substitute for a survey. Some lenders include a basic valuation with certain products, so ask.
You should usually pay for your own survey. The common levels are a condition report (the lightest), a homebuyer report and a full building survey. As a general rule, the older or more unusual the building, the more detailed the survey you should consider. A survey that finds a damp or roofing problem can give you a reason to negotiate on price or walk away, which can save far more than it costs.
Mortgage costs vary by deal:
- Arrangement or product fee: can be paid upfront or added to the loan, in which case you pay interest on it.
- Broker fee: some brokers are free, some charge, some are paid by the lender. Ask before you instruct.
- Booking fee: sometimes charged when you apply.
- Early repayment charges: relevant if you might overpay or move within a fixed-rate period.
When you compare mortgages, look at the total cost over the fixed period, not only the headline rate. A low rate with a large fee can cost more than a slightly higher rate with no fee, particularly on a smaller loan. Our mortgage calculator shows the monthly payment for different rates and terms.
Moving costs and the first months of ownership
These are the costs that get forgotten because they come after the exciting part. Make a line in the budget for each:
- Removals: a van and helpers, or a professional firm, depending on how much you own.
- Buildings insurance: your lender will insist on this from exchange of contracts, so you need a policy in place before completion.
- Contents insurance: not required by the lender, but sensible once your belongings are in the property.
- Redirecting post, changing addresses and broadband setup.
- Furniture and appliances: flats are often sold with kitchen appliances but not always; ask the seller for an inventory.
- Immediate repairs: locks, a deep clean, small decorating jobs.
- Leasehold costs: service charge, ground rent and sometimes a sinking fund contribution, which your solicitor should explain before you exchange.
New owners also take on the running costs that a landlord used to handle: council tax, utilities, maintenance and possibly a bigger commute. If you are moving from a rented room to a two-bedroom flat, expect the monthly total to rise even if the mortgage is similar to your old rent. Our How much mortgage can you afford? guide covers how lenders assess affordability, and it is worth running your own budget rather than relying on the maximum offered.
A worked example: £280,000 first home, England
Here is a sample budget for a first-time buyer in England, with a 10% deposit. The deposit and tax are real calculations. The other lines are placeholders to show the shape of the budget, so replace them with your quotes.
| Item | Amount | Notes |
|---|---|---|
| Deposit (10%) | £28,000 | Calculated: 10% of £280,000 |
| Stamp Duty | £0 | Calculated: first-time buyer relief, price under £300,000 |
| Legal fees and searches | placeholder | Get written quotes |
| Survey | placeholder | Depends on the age and type of home |
| Mortgage fees | placeholder | Check whether the fee is added to the loan |
| Removals and insurance | placeholder | Insurance is needed from exchange |
| Reserve for repairs | placeholder | Your choice of cushion |
If the buyer in this example earns £38,000 and has no other debts, the affordability calculator at 4.5 times income gives a maximum loan of about £171,000, which with a £28,000 deposit would buy a home at around £199,000. That is well below £280,000, so the loan to buy at that price would need either a bigger income (including a joint application), a larger deposit or a lender willing to go above a simple multiple. This is the kind of mismatch to find out early, before you are viewing homes you cannot finance.
At 4.5 times income a £252,000 loan needs a household income of around £56,000. Lenders also test your spending, credit record and resilience to higher rates, so a single multiple is only a starting point.
Common mistakes first-time buyers make
- Saving only the deposit. The extra cash needs can run to several thousand pounds even when Stamp Duty is nil.
- Forgetting the £500,000 cliff. The relief ends over that price in England and Northern Ireland, and the standard rates apply to the whole price.
- Treating the lender’s valuation as a survey. It tells the lender the property is worth the loan, not that it is free of defects.
- Ignoring leasehold costs. Ground rent, service charges and lease length can affect both cost and your ability to sell later.
- Choosing a mortgage by headline rate. Fees, the length of the fixed period and early repayment charges all change the real cost.
- Not holding a reserve. A boiler failure in month two is much harder to handle with an empty account.
- Assuming the maximum loan is the right loan. The lender’s maximum is based on a formula, not on your lifestyle.
Try the calculator
Check the tax on your own price with the Stamp Duty Calculator, then test what a lender might offer on your income and deposit with the Mortgage Affordability Calculator.
Frequently asked questions
How much do I need on top of the deposit when buying my first home?
There is no single number, because costs vary by price, location and the type of property. Budget for legal fees, a survey, mortgage fees, insurance, moving costs and a reserve for repairs, and add Stamp Duty if your price is above the first-time buyer threshold. Get written quotes to turn the list into a real figure.
Do first-time buyers pay Stamp Duty?
In England and Northern Ireland, first-time buyers pay nothing up to £300,000 and 5% on the part from £300,001 to £500,000, but get no relief if the price is above £500,000. In Scotland the nil-rate band goes up to £175,000. Wales has no first-time buyer relief. Check the official sites for current rules.
Is a survey worth paying for?
Usually yes. The lender’s valuation protects the lender, not you. A survey can reveal damp, structural movement or roofing problems that affect the price or your decision, and the fee is small compared with a major repair.
Can I add fees to the mortgage?
Some lenders let you add the product fee to the loan, which spreads the cost but means you pay interest on it. Legal fees and Stamp Duty are normally paid in cash by completion day.
When do I need buildings insurance?
From the day contracts are exchanged, because the property becomes your responsibility for risk at that point and the lender will require cover. Your solicitor will confirm the date, so arrange the policy before then.