Use our frequently asked questions to find out what you need to know about first time buying.
We will only lend you a percentage of what the property is worth, so you will need to put down some of your own money towards the cost. We call this a deposit. At the moment, your deposit should be at least 10% of the property’s value (unless you’re applying for our Lend a Hand mortgage). If you can put down more than 10%, you can often get a lower initial interest rate.
However, the more deposit you put down the less you have to borrow. This will ultimately save you money and you can often get a cheaper mortgage product.
As well as your deposit, there are other costs associated with buying a property and taking out a mortgage.
Typical ones that apply to most buyers include conveyancing fees, Stamp Duty Land Tax/Land and Buildings Transaction Tax (properties in Scotland), valuation fees and Land Registry fees.
Use our mortgage calculators to see how much you could borrow, and what your monthly payments might be.
Have a look at our savings tips page and view our savings range to help you get started.
Lend a Hand Mortgages
With Lend a Hand, your mortgage payments stay the same for 3 years, and you don’t need to save for your own deposit. Instead, a family member can put down 10% of the cost of your home, up to £500,000, which they’ll get back plus interest after 3 years (subject to conditions). Learn more about the full Lend a Hand details and conditions.
Back to topAs long as one person applying has never owned a property before, you can apply for a first time buyer mortgage with Lloyds Bank.
An Agreement in Principle (AIP) provides you with a personalised commitment- a free indication of how much we might be able to lend you. If you're buying a home it'll give you a clear idea of which properties you could afford. Estate agents will often ask to see an AIP to show that you are a committed buyer.
We do what's called a soft credit check as part of the process. Soft credit checks can only be seen by yourself on your credit report and do not affect your credit rating or ability to borrow from other lenders or ourselves in the future, even if you're declined an AIP on this occasion.
Back to topAn Agreement in Principle, also known as a 'Decision in Principle' or 'Mortgage Promise', is useful if you haven’t found a property you want to buy but would like to know how much you could borrow.
All we need is a few personal details about you and anyone else who will be named on the mortgage. Then we’ll contact a credit reference agency for a credit search and give you a credit score. If you reach our pass mark, we’ll give you a certificate that you can use to show a seller you can get a loan.
A mortgage offer is issued by a lender once your application has been received and necessary checks, such as a valuation and confirmation of your details, have been carried out. It sets out the terms under which the lender is prepared to offer you a loan.
Back to topThe property you buy must be located within the UK and loans can only be used to buy your main residential home or for purposes relating to this home.
We will consider lending you money to buy different types of property. We may ask you to provide a bigger deposit on some types of property than others.
Any loan we make is subject to a property valuation.
Back to topWhile we will consider many types of property, we have a responsibility to ensure that a property is suitable security for a mortgage.
As a result, we will not lend against properties where the lower of the valuation or purchase price is below £40,000.
Back to topA mortgage has one key difference to other loans – it is secured against your home. If you cannot keep up with your monthly repayments or you get into financial difficulties you should contact us straight away so we can give you the help you need.
Remember, house prices can go down as well as up. If you owe more than the current value of your home, you will be in negative equity. If you need to move home and sell your property, and if its value has dropped below what you paid for it, there may be a shortfall between the amount you owe on your mortgage and the amount you get for the sale which you will need to repay.
Back to topMortgages can last for a long time, so it is important you get the one that is right for you. You will need to think about such things as the type of loan, how long you want it for and what type of product you would like.
Methods of repayment - there are three different ways of repaying your mortgage. These are repayment, interest-only, and a combination of repayment and interest-only.
Mortgage terms - mortgage terms of up to 40 years are available. How long the mortgage lasts will affect your monthly payments and the total cost of the mortgage.
With a repayment mortgage, the longer the term, the lower the monthly payment. However, it will take you longer to pay off the loan so you will pay more interest. This means it will cost you more over the life of your mortgage.
With an interest-only mortgage, the length of the term makes no difference to the monthly payments because these are only paying off the interest charges and not the loan itself.
With an interest-only mortgage your mortgage term needs to match the time when you will have enough money in your repayment plan(s) to repay the loan.
Mortgage products - we may have different types of mortgage products with different types of interest rates. These change from time to time and we'll give you details of the current range when you apply.
Depending on the mortgage product you chose, you may have to pay an early repayment charge if you repay all or part of your mortgage early or we agree you can change products.
Product incentives - from time to time we may offer mortgage products that include an incentive. The interest rate for products with incentives may sometimes be slightly higher than for products without incentives.
So you will need to consider whether the incentive available at the start of the mortgage is more important to you than the slightly lower interest rate you may get during the product rate period without the incentive.
Your mortgage adviser will ask you about your preferences and discuss your needs and circumstances before deciding which mortgage to recommend to you.
Look at key features to help you understand more about our mortgages.
Back to topGet credit ready
Before applying for a mortgage, it’s good to understand that mortgage lenders will take into account your financial history and credit rating. This helps them to know if you’re likely to be able to make your mortgage repayments.
While each lender has its own criteria, here are some things you can do now to make sure your credit profile, and therefore your mortgage application, is in the best shape possible.
8 steps to help improve your credit rating
It is a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar, fixtures and fittings. It's also a good idea to take out contents insurance as well - this protects all your possessions in your home, from furniture to jewellery.
You may want to look into insurance to protect your mortgage for example Life Cover and Critical Illness Cover.
Back to topThis will depend on the mortgage product, there may be a product fee to pay and early repayment charges if you repay early.
You will need to check our current rates for full details. Any product fees can usually be added on to your mortgage on completion.
There could be other charges and standard costs which you may have to pay during the course of setting up your mortgage.
You will be charged interest on any fees, charges and standard costs added to your loan.
There are other costs associated with buying a property and taking out a mortgage.
Back to topLooking for a property can be daunting – think about;
Our house viewing checklist may be useful when you start to view properties. It will help you keep track of the various properties you view.
Also look at our house-viewing tips.This link opens in a new browser tab and in PDF format. The PDF is approximately 47kb in size...
Back to topMoving house can be stressful but it does not have to be. This useful checklistThis link opens in a new browser tab and in PDF format. The PDF is approximately 47kb in size. will make it easier to tackle the big move.
Back to topYou will usually be asked for conveyancer details to take care of the important legal work when you apply for your mortgage.
You will need to choose a conveyancer from our approved list. So it is worth checking with us before you instruct a conveyancer.
Back to topWhen you take out your mortgage, you arrange to have a fixed or variable rate product for a period of time.
At the end of this time, the product will end and your loan will usually be transferred to one of our lender variable rates. At this point, you may choose to move it to a new product for a further period of time.
Back to topIt is sometimes possible to take a product rate with you to a new mortgage - we sometimes call this 'porting'. Your Illustration and offer letter will say if any of your product rates can be taken to a new mortgage.
Back to topWe lend you the money on the basis that you are using the property as your main residence.
If your circumstances change after you take the mortgage, and you want to let the property you must ask our permission.
We do not guarantee that we will allow you to let your property and you may have to transfer onto another product if we do allow this.
Back to topDue to COVID-19, Solicitors and Valuers are offering limited services, leading to a delay in customers completing on their mortgage. There is no need to contact us. We offer a three-month extension on top of the standard complete by date that is detailed in your mortgage offer e.g. if the current complete by date was 31 May, we have extended it until 31 August. This will give you time to try and complete on your agreed mortgage rate without the need to switch to a new product.
Back to topLloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
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