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Mortgages can be a daunting and confusing subject and, if you’re looking to buy your first property, you may not have a clue where to start.

If you have never previously owned a property, you are considered by mortgage lenders to be a first-time buyer. It can be extremely difficult to make your way on to the property ladder but there are a number of initiatives that could offer crucial help.

The Help-to-Buy government scheme offers an equity loan to first-time buyers who are looking to purchase a newly built flat or house. Buyers are required to provide a minimum of 5% as a deposit for the property in question so, if the property costs £250,000, a minimum of £12,500 is needed for a deposit. If certain criteria are met, the government can lend you up to 20% of the property value, meaning that a mortgage can be agreed for 75% of the total cost. This is not a free gift, however, and you will be expected to pay the equity loan back. In the first five years after your purchase you will be able to make payments with no added interest, after this point interest will be added.

The Help-to-Buy ISA follows a similar plan as the deposit scheme but focuses on the process of saving the necessary deposit amount before a mortgage application is made. Multiple high street banks now offer this savings account, which requires a minimum overall deposit of £1,600 from the account holder, to be eligible for a government contribution of 25% of your saved deposit, up to £3,000. Therefore, if you have £10,000 saved, the government will contribute a further £2,500 to your deposit savings. An extra benefit of this scheme is that it is available to individual first-time buyers and not entire households. So, if you’re buying your first property with a partner or friend, you could end up with double the maximum contribution. Repayment plans follow a similar structure to the deposit scheme.

A Shared Ownership mortgage is offered exclusively to first-time buyers. However, it could be perfect for those keen to get on the property ladder for the first time but who are limited by the amount of funds they have available to apply for through a mortgage lender. This mortgage option will allow you to buy a share of a property from the council or a housing association and pay rent on the percentage that is still owned by the landlord. The rent is paid back at a reduced rate along with your mortgage payment but it means that your mortgage could be equal to anything from a quarter to three-quarters of the property value. You can then choose to buy the share of the property you don’t own as funds become more readily available to you.

Finally, a Self-Build mortgage may not be at the forefront of your mind as a first-time buyer and it isn’t a scheme that could particularly help you to buy a property but that does not mean it isn’t a viable option. With a self-build mortgage, the funds are released in stages rather than all at once, to help cover each stage of the build as it is completed. With house prices changing regularly, building your own home may be a more cost-effective alternative. This option requires significant planning and organisation before applications are made so consulting with an expert is absolutely crucial.

With multiple mortgage options for first-time buyers, you’re sure to find a solution that best suits your needs. The Mortgage Hut can offer bespoke mortgage advice to all, whether you’re looking to begin your mortgage application or simply need more advice. Contact the team today to take your first step on the property ladder.