What It Really Costs to Buy Your First Home
First-time buyers tend to plan around a single number — the deposit — and are then caught out by everything sitting behind it. There are really three questions to settle before you start booking viewings: how much cash do I need on the day, how much will a lender let me borrow, and what will it cost me every month? We'll take them one at a time, using a £250,000 first home with a 10% deposit as the worked example.
1. The cash you need on the day
The deposit is the biggest single figure, but it never turns up alone. Here is the real cash a first-time buyer hands over to complete on a £250,000 home:
On a £250,000 first home with a 10% deposit. Stamp Duty is £0 thanks to first-time buyer relief — but the extras beyond the deposit still add up to nearly £3,800.
That first-time buyer relief is doing quiet but heavy lifting. A home mover buying the same £250,000 house would owe £2,500 in Stamp Duty, whereas a first-time buyer pays nothing: in England the relief gives 0% up to £300,000 and 5% on the slice between £300,001 and £500,000. Push the price above £500,000, though, and the relief vanishes entirely — standard rates then apply to the whole purchase. The Stamp Duty calculator shows exactly where your price lands.
Save for the deposit, then add roughly £3,000–£5,000 on top. The fees are far smaller than the deposit, but they fall due in cash on the very same day.
2. How much can you actually borrow?
Lenders usually cap a mortgage at around 4.5 times income — sometimes a little more for higher earners or with certain schemes. Your maximum purchase price is that loan plus your deposit, so income tends to set the ceiling more than savings do. The mortgage affordability calculator works out your own figure; here is how the ladder climbs:
Maximum purchase price at 4.5× income plus deposit — the green slice is the mortgage, the gold slice the deposit. Income moves the ceiling far more than savings do, which is why buying with a partner, or a pay rise, changes what's within reach.
| Income | Borrow (4.5×) | Deposit | Max price | Monthly* |
|---|---|---|---|---|
| £30,000 | £135,000 | £20,000 | £155,000 | £750 |
| £40,000 | £180,000 | £30,000 | £210,000 | £1,000 |
| £50,000 | £225,000 | £40,000 | £265,000 | £1,251 |
| £60,000 (joint) | £270,000 | £50,000 | £320,000 | £1,501 |
*Repayment mortgage on the loan amount at 4.5% over 25 years; rates and lender multiples vary. The mortgage calculator works out the monthly repayment for any loan, rate and term.
3. The monthly reality
The mortgage is only part of what leaves your account each month. First-time buyers consistently underestimate the running cost of owning compared with renting — the repairs a landlord used to absorb are suddenly yours:
- Mortgage — the big one, fixed for a few years and then re-priced at whatever rates are doing.
- Buildings insurance — required by your lender; contents cover is optional but sensible.
- Council tax & utilities — often higher than your share of a rental was.
- Maintenance & sinking fund — boilers fail and roofs leak; setting aside around 1% of the property value a year is prudent.
- Service charge & ground rent — for flats, and sometimes substantial.
Try the true cost of buying calculator →
A realistic plan
Work backwards from the day you complete. Choose a target price, size the deposit against it, then add the fees on top to reach your real savings goal — not the deposit on its own. Get a mortgage agreement in principle early so you know your true ceiling before you fall for a place beyond it. And stress-test the monthly figure against an interest rate higher than today's, so a remortgage in a few years doesn't catch you out.
Buying a first home is the biggest financial commitment most people ever make. Model it properly, keep a cash buffer beyond the bare minimum, and treat every figure here as the starting point for a conversation with a qualified mortgage adviser — not a promise of what you'll be offered.
Common questions
Sources
GOV.UK — Stamp Duty for first-time buyers and MoneyHelper — first-time buyer costs. See our full methodology and rates.
This article is general information for the 2026/27 tax year and not personalised financial advice. Check the figures on your own mortgage illustration and verify Stamp Duty and thresholds against GOV.UK before making decisions.