From renter to first-time buyer: schemes, deposits and steps

By Sam Kane · Last checked 9 October 2026

To go from renter to first-time buyer, you need three things: a deposit, money for the costs of buying, and a lender who agrees to lend to you. First-time buyer schemes, such as the Lifetime ISA and shared ownership, can help with the first two. This guide explains each step, from the rent you pay today to the keys of your first home.

The money and credit parts of this guide apply across the UK. Some schemes differ in Scotland, Wales and Northern Ireland, and we say where.

The short version

Mortgage vs rent: what is the difference?

When you rent, you pay a landlord to live in their home. When you buy with a mortgage, you borrow money from a bank or building society to buy a home of your own. You pay the loan back each month, with interest, usually over 25 to 35 years.

Renting Buying with a mortgage
Monthly payment Rent to your landlord Mortgage payment to your lender
Money up front Usually 1 month’s rent in advance and a deposit of up to 5 weeks’ rent A deposit (often 5% or more of the price), plus the costs of buying
Repairs Your landlord pays for most repairs You pay for all repairs
Moving You can leave with 2 months’ notice (England) You need to sell, or rent the home out with your lender’s permission
What you build A record of paying on time A share of the home’s value, called equity
Price changes Rent can go up once a year (England) A fixed rate keeps your payment the same for the fixed period

Equity means the part of the home you own outright. If your home is worth £250,000 and you owe £200,000 on the mortgage, your equity is £50,000.

Is a mortgage cheaper than rent?

Sometimes it is, and sometimes it is not. It depends on the price of the home, the size of your deposit, the interest rate and how long you take to pay it back.

Here is an example. The figures are made up to show how the sums work. They are not a quote.

If you pay £1,150 a month in rent for a similar home, the mortgage payment in this example is a little lower. But the mortgage is not your only cost. As an owner you also pay for:

So the honest answer is: compare the full cost, not only the monthly payment. A mortgage calculator from a bank or from MoneyHelper can show the payment for your own numbers.

How much deposit do you need to buy a house?

A deposit is the part of the price you pay yourself. The mortgage covers the rest.

Most mortgages for first-time buyers need a deposit of at least 5%. The government’s mortgage guarantee scheme supports mortgages for up to 95% of the price, so 5% deposits stay on offer across the UK.

Home price 5% deposit 10% deposit 15% deposit
£150,000 £7,500 £15,000 £22,500
£200,000 £10,000 £20,000 £30,000
£250,000 £12,500 £25,000 £37,500
£300,000 £15,000 £30,000 £45,000

MoneyHelper says you usually need a deposit of at least 5% to 10% of the price. A bigger deposit usually gives you more mortgages to choose from and lower interest rates. MoneyHelper says a deposit of 40% typically gets the most competitive rates. Our guide to how much deposit you need for a house has worked examples at today’s prices.

Can you buy a house with no deposit?

A small number of mortgages lend 100% of the price. One example is Skipton Building Society’s Track Record mortgage. It is for people aged 21 or over who have not owned a UK home in the last 3 years and who have paid rent on time for 12 months in a row within the last 18 months. Skipton checks this with bank statements or a letting agent letter, not your credit file. On 9 October 2026, Skipton’s website still listed it.

A 100% mortgage means you start with no equity. If prices fall, you could owe more than your home is worth. Read our guide to 100% mortgages for the lenders that offer them and the risks.

What other costs come with buying a home?

Plan for these on top of your deposit.

Ask for quotes before you make an offer, so the costs do not surprise you.

How much can you borrow for a mortgage?

Lenders start with your income. Many lenders lend up to about 4 to 4.5 times your yearly income before tax. If you earn £35,000, that could mean a mortgage of around £140,000 to £157,500. For two buyers, lenders usually add your incomes together.

Lenders cannot give many large loans compared with income. Bank of England rules limit most lenders so that no more than 15% of their new mortgages are at 4.5 times income or more.

Income is only the start. Lenders then check:

Our rent affordability calculator works out a comfortable rent from your income. It is a useful first check before you save for a deposit.

What lenders see on your credit file

Your credit file is a record that the credit reference agencies, such as Experian, Equifax and TransUnion, keep about you. It shows your credit cards, loans, phone contracts and some bills, and whether you paid them on time. When you apply for a mortgage, the lender reads your file.

Many renters have a “thin” credit file. That means it has very little on it, for example because you have never had a loan or a credit card. A thin file can make it harder for a lender to judge you, even if you have always paid your bills.

Rent is often your biggest bill, but it does not appear on your credit file unless someone reports it. Experian says that when rent is reported, lenders may see a history of on-time rent as a sign you’re more likely to pay them back. Experian says its 1,250 credit score includes rent payments reported to it.

Our guide to the credit score you need for a mortgage explains what lenders check, and our guide to rent history and mortgages shows how lenders can see your rent.

You can report your rent through a rent reporting company. Report My Rent can add your rent payments to your Experian, Equifax and TransUnion credit files each month. You keep paying your landlord as you do now. Our guide on rent and your credit file explains more.

Each lender makes its own decision. Reported rent gives it more of your history to look at.

What first-time buyer schemes can help?

On 9 October 2026, GOV.UK still listed all four schemes below. First Homes is still open, but few new First Homes are being built. The Lifetime ISA is due to be replaced by a new First Time Buyer ISA, with no start date yet. Check each one on GOV.UK before you rely on it.

The Lifetime ISA and the mortgage guarantee scheme cover the whole UK. The shared ownership and First Homes rules here are the England versions.

Scheme What it does Main rules
Lifetime ISA The government adds 25% to what you save, up to £1,000 a year Open it before you turn 40. Save up to £4,000 a year. The home must cost £450,000 or less.
Shared ownership You buy a share of a home and pay rent on the rest Shares from 10% to 75%. Household income of £80,000 or less (£90,000 in London).
First Homes You buy a new home for 30% to 50% less than its market value First-time buyers only. Income of £80,000 or less (£90,000 in London). A mortgage for at least half the price.
Mortgage guarantee scheme Helps lenders offer home loans with a 5% deposit Permanent since July 2025. Covers the whole UK. You apply to a lender, not to the government.

Lifetime ISA

A Lifetime ISA is a savings account for your first home or for later life. You must make your first payment before you turn 40, and the government adds a 25% bonus on up to £4,000 a year. To use it for a home, the home must cost £450,000 or less and you must buy at least 12 months after your first payment. Our house deposit guide explains how a Lifetime ISA works, including the charge if you take money out for anything else.

The government plans to offer a new First Time Buyer ISA in place of the Lifetime ISA. It consulted on the plan from June to August 2026 and has not set a start date. Until then, GOV.UK still lists the Lifetime ISA as open.

The consultation also set out what the government proposes for people who already have a Lifetime ISA. These are proposals, not final rules:

Shared ownership

With shared ownership, you buy part of a home, usually between 25% and 75%, and on some homes as little as 10%. You pay rent to the landlord on the part you do not own. You also usually pay a service charge. Your deposit is usually 5% to 10% of the share you buy, not of the whole home.

You can usually buy more of the home later. This is called “staircasing”.

Shared ownership can be a way in when full prices are out of reach. But you pay rent, a service charge and a mortgage at the same time, so add up all three.

First Homes

First Homes are new-build homes sold at 30% to 50% less than their market value. The discount stays with the home, so when you sell, you sell at the same discount. Councils can add local rules for the first 3 months of sale, such as giving priority to key workers or local people.

GOV.UK still lists First Homes as open, but since December 2024 councils no longer have to ask builders for them, so very few are being built. Our First Homes guide explains the rules.

Mortgage guarantee scheme

You do not apply to this scheme yourself. The government gives lenders a guarantee on mortgages where your deposit is at least 5% but less than 10% of the price, which makes lenders more willing to offer them. Ask a lender or a mortgage broker whether a mortgage is part of the scheme. Our mortgage guarantee scheme guide has the rules.

Deposit Unlock, an industry scheme for new builds, closed to new buyers in April 2026.

If you are thinking about buying the home you rent from your landlord or a housing provider, read our guide to rent to buy.

Your plan: from renter to buyer

  1. Work out your numbers. Add up your income, your bills and what you can save each month.
  2. Set a deposit target. Pick a price range in the area you want, and work out 5% and 10% of it.
  3. Choose where to save. If you are under 40, look at a Lifetime ISA, because of the 25% bonus.
  4. Check your credit file. You can see your file with Experian, Equifax and TransUnion. Fix any mistakes, such as an old address.
  5. Register to vote at your address. Lenders use the electoral register to check who you are and where you live.
  6. Build your history. Pay bills on time. Think about reporting your rent so it shows on your credit file.
  7. Cut debts where you can. Lower monthly payments on loans and cards can mean you can borrow more.
  8. Get a mortgage in principle. This is a lender’s first view of how much they could lend you. It helps when you make an offer.
  9. Talk to a mortgage broker. A broker compares mortgages from many lenders and can tell you which lenders look at rent history.

Keep your rent working for you while you save

If you rent privately in England, the Renters’ Rights Act means you can leave your tenancy with 2 months’ notice at any time. That makes it easier to move when your purchase completes. Read our guide to the Renters’ Rights Act for the full rules.

While you save, keep your rent at a level you can manage. Every pound of rent you save can go into your deposit. Our guide to how much rent you can afford shows how to find the right level.

Common questions

Is it better to rent or buy?

It depends on your plans, your savings and prices where you live. Buying lets you build equity, but you pay all repairs and the costs of buying. Renting is more flexible and has lower costs up front. Compare the full monthly cost of both, not only the rent and the mortgage payment.

How much deposit do I need for my first home?

Most first-time buyer mortgages need at least 5% of the price. A few lenders offer 100% mortgages to renters with a strong record of paying rent on time.

Does paying rent help me get a mortgage?

It can. Some lenders look at your rent history, and rent that is reported to Experian, Equifax and TransUnion shows on your credit file for lenders to see. Lenders also look at your income, spending and deposit. Our guide to rent history and mortgages explains more.

How much can I borrow with my salary?

Many lenders lend up to about 4 to 4.5 times your yearly income. The final amount depends on your spending, your credit file and your deposit.

Do first-time buyers pay stamp duty?

No stamp duty on homes up to £300,000 in England and Northern Ireland. See what other costs come with buying a home.

Where to get help at no cost

Sources

This guide is general information, not financial advice. A mortgage is a loan secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

You already do the hard part.

You pay your rent every month. From now on, your credit file can show it.

a month