BACK TO ALL BLOGS 
Cantell & Co and The Surrey Mortgage Company Limited are two separate entities. The Surrey Mortgage Company Limited provides mortgage and insurance advice only
First-Time Buyer? Here’s How Mortgages Actually Work
At Cantell & Co, our team understands the unique journey of first-time buyers. We pride ourselves on recommending personalised support, guiding you through every step, from understanding your budget and mortgage options to finding the perfect property and navigating the legalities. We're here to ensure you feel safe, understood, and in capable hands throughout your homeownership journey.
Buying your first home is a huge milestone – but the mortgage side can feel like a completely different language.
Here’s a clear breakdown of how it works and what you actually need to focus on.
How Much Can You Borrow?
Most lenders will base this on your income, monthly commitments, and credit history. Typically, multiples are between 4.5x & 5x your income, though this varies, with some lenders able to increase this to 6x your income depending on your circumstances.
Your Deposit
The minimum deposit more mainstream lenders accept is usually 5%, but you should be mindful that 10%+ gives access to lower rates. The larger the deposit, the lower the risk to the lender, and therefore typically the lower the rate. Depending on your circumstances, some lenders do offer deposits as low as £5,000, which can be a really helpful if saving for a deposit is your main barrier.
Agreement in Principle (AIP) / Decision in Principle (DIP)
Known as an AIP or DIP, these are decision given after approaching a lender directly for a mortgage. They confirm the amount you could borrow after they’ve carried out a check on your credit score. AIP’s/DIP’s are usually valid for 30-90 days. Having one can show you're serious about buying a home and help guide your search as you’re provided with clear lending parameters.
Choosing the Right Mortgage
Each lender has a range of products available, typically two types – a fixed rate, where the agreed rate is guaranteed for 2, 3 or 5 years, and a variable rate that follows fluctuations in the Bank of England base rate. The right mortgage for you will depend on how much flexibility you want in your mortgage and whether you need the ability to make regular overpayments or exit the deal early free of Early Repayment Charges. Some lenders agree to lend more if they know the payments aren’t going to change for the first 5 years.
After Your Offer Is Accepted
Once you’ve had an offer accepted, a mortgage application will be submitted. This is after your needs and circumstances have been assessed, and advice has been given on the best way to proceed. Post application, the lender will carry out checks on you and the documents/evidence provided. They will also schedule a valuation on your chosen property to confirm its worth what you’ve offered to pay for it, and is suitable security for the lender. Once these checks have been carried out and satisfied, then mortgage offer issued, typically valid for up to 6 months to give you time to complete on your purchase.
Extra Costs
Extra costs outside of your budget to consider are Solicitors fees, the cost of any enhanced property surveys you’d like, product fees, and moving costs. These costs should be factored in at the very beginning to help you establish how much of a deposit you have.
Final Thought
Mortgages are big commitments and its important to understand that your home may be repossessed if you don’t keep up with the repayments on your mortgage. Therefore, getting advice early helps you understand your budget, your needs and circumstances, and what types of mortgages are available to you – Helping you move forward with confidence. Find out more
Cantell & Co and The Surrey Mortgage Company Limited are two separate entities. The Surrey Mortgage Company Limited provides mortgage and insurance advice only