Question
I had hoped to start looking for my first home in 2026, but decided to hold off for a few months to save up more of a deposit. In advance, I look at the interest rates offered.
Do first-time buyers generally pay higher rates for their mortgages, and what rate is currently considered a “good deal” for someone buying their first home? I have about a 20% deposit to put down, so I could take advantage of some good deals – but will the fact that this is my first home penalize me when it comes to getting the best rate?
Darren’s answer
Many first-time buyers look at prices before they’re ready to buy so they know what’s realistic when they start looking for a home.
The last thing you want to do is find your dream home and realize it’s unaffordable.
Let’s look at your three questions in turn:
1. Do first-time buyers pay higher prices?
The short answer is no. Lenders don’t penalize you for being a first-time buyer, rather they try hard to support first-time buyers.
Mortgage pricing mainly depends on:
Many major lenders offer first-time buyers the same basic products as everyone else, sometimes with added incentives (no-fee deals, cash back, flexible criteria) that are worth asking your broker about.
In practice, first-time buyers often do very well with interest rates because they typically purchase standard residential properties and hold mortgages for repayments.
2. What’s a good deal now?
It’s always difficult to quote specific prices due to how frequently they change.
Interest rates have been drifting gradually lower since late 2025, with a sharp rise in early 2026. This appears to have stabilized, and rates have begun to fall again (at the time of writing). True, they are still well above the extremely low levels of the early 2020s.
As mentioned above, lenders try to support first-time buyers, and there are deals and incentives available. This will depend on when you apply for the mortgage but it is worth keeping a close eye on what is available.
3. Does a 20% deposit put you in a strong position?
Yes, a 20% deposit is very healthy and will net you a range of lower rates than if you made a 5% or 10% deposit.
The 80% loan-to-value ratio is one of the biggest drops in interest rates, and it opens up more lenders, lowers interest rates and, most importantly, improves affordability stress tests.
You are in a strong position and working towards your goal.
Be mortgage ready
Before applying, it’s important to make sure you monitor your credit and do everything you can to show that you are a good borrower. For example, by:
- Avoid new credit applications
- Keep credit card balances low (even if settled monthly)
- Remains on the electoral list
- Maintain stable employment
- Maintain clear traceability of your deposits (savings log)
The first step on the journey is to speak to a mortgage broker who can offer a decision in principle (DIP), which is where lenders will check your affordability and credit history and tell you how much you can borrow.
A mortgage broker will review your specific circumstances and guide you through the full process.
