Buying your first home is more than securing an attractive rate — it’s about understanding the total financial commitment. In Part 1 we focused on mortgage products, LTV, and eligibility. This instalment from Area360 turns the spotlight onto the numbers behind the deal so you can compare offers confidently, avoid cash flow shocks, and stay on track after completion.
Lenders advertise their sharpest rates, but they seldom headline the product fees, insurance requirements, or the impact of interest rate swings once your fixed period ends. When you look at the whole package — upfront cash, ongoing ownership costs, and potential rate rises — you often find that the “cheapest” rate is not the cheapest deal. Use the checklist below to map the true price tag.
| Cost item | Typical range | When paid | Quick tip |
|---|---|---|---|
| Deposit | 5–20% of purchase price | On exchange/completion | Bigger deposits lower rates and insurance premiums. |
| Stamp Duty Land Tax (SDLT) | 0–5% for first-time buyers | Within 14 days of completion | FTB relief = 0% up to £300k then 5% on £300k–£500k; over £500k, standard rates apply. |
| Lender product fee | £0–£2,000 | Often on completion | Adding to the loan raises monthly payments; paying upfront keeps debt lower. |
| Valuation & surveys | £250–£1,200 | Before exchange | Pay for a homebuyer or structural survey if the property is older/unique. |
| Legal & conveyancing | £800–£1,500 | Completion | Ask for all-in quotes that include searches, ID checks, and bank transfer fees. |
| Moving & set-up | £400–£1,500 | Completion week | Include removals, storage, mail redirection, and immediate repairs. |
Upfront cash needed = Deposit + Fees payable before completion + 3 months of living costs (recommended buffer).
Reality check: keep this sum in an easy-access account so nothing derails exchange day. If the total feels tight, revisit your property shortlist or allow more time to save.
Build a monthly budget that captures every recurring line. A simple spreadsheet works — list your net income, then subtract:
Tracking these alongside your other commitments highlights whether the home stays affordable once the initial excitement fades. If the numbers are tight, consider delaying completion, choosing a slightly cheaper home, or negotiating harder on the purchase price.
Lenders already assess affordability at a higher “stress” rate, but you should run your own scenarios:
For example, a £250,000 mortgage over 30 years costs about £1,297/month at 4.70%. At 5.70% it’s roughly £1,451, at 6.70% £1,613, and at 7.70% about £1,782. Run the same calculations for your own figures, then decide whether a longer fix, planned overpayments, or holding more cash savings gives you the right buffer.
Once you have your cash flow model, compare mortgage offers over the fixed or introductory period:
The result is your total cost of ownership for the initial term, which makes it easy to see whether a low-rate/high-fee fix or a no-fee slightly higher rate works best. The winning deal is the one that keeps your cash flow comfortable and fits your plans for the property.
To see how the numbers stack up in practice, here’s a London-focused snapshot using a 10% deposit and a representative two-year fix at 4.70% over 30 years (average 90% LTV two‑year fix, updated 18 Oct 2025).
| Property price | 10% deposit | SDLT (FTB) | Other fees* | Total upfront cash | Est. monthly payment @4.70% (30 yrs) |
|---|---|---|---|---|---|
| £350,000 | £35,000 | £2,500 | £3,799 | £41,299 | £1,634 |
| £500,000 | £50,000 | £10,000 | £3,799 | £63,799 | £2,334 |
| £750,000 | £75,000 | £27,500 | £3,799 | £106,299 | £3,501 |
*Assumes a £999 product fee, £600 survey, £1,200 legal/conveyancing, and £1,000 moving costs. Monthly payments are capital and interest on a 90% LTV repayment mortgage at 4.70%; adjust for your chosen rate, term, or deposit size.
Need exact stamp duty numbers for your purchase? Run the figures through the Area360 Stamp Duty calculator before you finalise your budget.
By combining cost mapping, stress testing, and like-for-like comparisons, you can approach negotiations knowing exactly what you can afford — and when to walk away. In Part 3 of the First-Time Buyer Series, we’ll cover working with brokers, negotiating with sellers, and preparing for completion day.