First-Time Buyers: Don’t Let Mortgage Myths Hold You Back

At a Glance

Let’s be honest. For many people, the idea of applying for a mortgage feels like walking into an exam they haven’t prepared for. You start reading about credit scores, deposit sizes, and affordability assessments, and before long, you have quietly talked yourself out of the whole thing.

That feeling is not rare, and you are not alone.

Too many first-time buyers across the UK are doing exactly the same thing. Not because a lender has turned them down, but because they assumed they would be. They are cutting back on spending, delaying big life decisions, and sacrificing things they love, all in pursuit of a goal they have decided is probably out of reach.

Here is the thing: for many of them, it isn’t.

New research from Lloyds has revealed something every first-time buyer in the UK needs to hear. The biggest barrier standing between many people and their first home is not their credit history, their job situation, or their bank balance. It is what they have always assumed to be true.

More Than Half Never Even Try

In 2026, Lloyds published research that painted a striking picture of the first-time buyer market. The headline figure? 58% of first-time buyers are ruling themselves out of a mortgage before they have even submitted an application.

That is more than half of all aspiring homeowners walking away from the starting line before the race has begun.

And the impact goes beyond the financial. The research showed that the pressure of saving and preparing for homeownership is already taking a very real toll:

• 64% of first-time buyers have cut back on everyday spending
• 46% have given up holidays
• 41% have reduced how often they eat out
• 28% have abandoned travel plans entirely
• 14% have delayed getting married or starting a family

These are not small sacrifices. These are people reshaping their lives around a goal, only to then quietly decide they probably won’t qualify anyway.

The problem, as the research makes clear, is not always affordability. In many cases, it is misinformation.

If you are a first-time buyer trying to figure out where to start, our First-Time Buyer’s Guide is a solid first step.

Check out our video:

You owe it to yourself to find out.

Let’s Set the Record Straight

Here are the seven most common myths that are stopping first-time buyers from applying, and the truth behind each one.

Myth 1: If You Have Debt, You Cannot Get a Mortgage

This is the big one. According to Lloyds, 58% of first-time buyers believe that having existing debt automatically disqualifies them. It does not.

Lenders are not looking for borrowers with zero financial history. They want responsible borrowers. Having a personal loan, car finance, or a credit card balance does not automatically rule you out. What lenders look at is:

• How much debt you have relative to your income
• Whether you are managing repayments consistently
• What impact the debt has on your overall affordability

There is a meaningful difference between carrying debt and being unable to manage it. If your repayments are up to date and your finances are otherwise in reasonable shape, many lenders will still consider your application. Find out more about getting a mortgage with existing debt.

Myth 2: You Need a 20% Deposit

37% of first-time buyers believe a 20% deposit is a requirement. It is not.

Many lenders will accept deposits as low as 5%. The Deposit Unlock Scheme is one option worth looking into, specifically designed to help buyers get on the ladder with a smaller deposit.

Yes, a larger deposit can improve the rates available to you. But that is very different from saying a 20% deposit is the only way in. Do not let that figure put you off finding out what you qualify for.

Myth 3: An Overdraft Will Stop You Getting Approved

40% of first-time buyers worry that using an overdraft will count against them. In most cases, it will not.

Lenders understand that overdrafts are a routine part of managing money for many people. What they look at more carefully is:

• Whether you are consistently in your overdraft
• Whether you regularly exceed your overdraft limit
• The overall pattern of your account management over time

One instance of going into your overdraft looks very different to a sustained pattern of financial difficulty. Context matters, and lenders know it.

Myth 4: A Less-Than-Perfect Credit Score Means Automatic Rejection

30% of first-time buyers assume that anything less than a perfect credit score guarantees a rejection. This is simply not the case.

A credit score is one part of a much broader assessment. Lenders also look at your income, your outgoings, your deposit, your employment history, and the type of mortgage you are applying for. There are also specialist lenders who work specifically with people who have had credit difficulties in the past. Read more about getting a mortgage with bad credit and what your options could look like.

Myth 5: You Cannot Get a Mortgage If You Receive Benefits

38% of first-time buyers believe that receiving benefits means they will automatically be turned away. This is a myth that deserves to be put to rest.

Some lenders do accept benefit income as part of a mortgage assessment. The type of benefit, alongside the rest of your financial profile, determines what options are available to you. The best step you can take is to speak to a broker who can identify the lenders most likely to consider your specific circumstances.

Myth 6: Changing Jobs Recently Will Cost You

31% of first-time buyers worry that a recent job change will damage their application. In many cases, it will not.

A new job, particularly one that comes with a higher salary or stronger career prospects, can even work in your favour. Lenders primarily want to know that you are in stable employment with a reliable income. Changing jobs does not have to mean putting your mortgage plans on hold.

There are some cases where it gets more complicated, for example if you are still within a probationary period. But this is not a blanket disqualifier, and it is always worth getting advice that is specific to your situation.

Myth 7: Being Self-Employed Means Disqualification

24% of first-time buyers who are self-employed assume they simply will not qualify. Self-employed mortgages do require more documentation, but they are absolutely available.

Most lenders will want to see two to three years of accounts or tax returns, though some will consider applications with just one year’s accounts. The key is working with a broker who understands the self-employed mortgage market and knows which lenders to approach.

Your Home Isn’t as Far Away as It Feels

Here is what we see at WIS Mortgages, time and time again. People come to us convinced that their situation is too complicated, too messy, or too unusual for a lender to consider. More often than not, they are wrong.

Mortgage decisions are nuanced. Lenders look at the full picture of who you are financially, not just one number on a credit report or one transaction on a bank statement. The decision to apply, or not apply, should never be made on assumptions alone.

Getting proper, qualified advice early in the process costs nothing. It means you find out exactly where you stand, based on your real circumstances rather than something you half-read online at midnight.

Frequently Asked Questions

How much can I borrow as a first-time buyer?

Most lenders will offer between 4 and 4.5 times your annual salary, though some specialist lenders will go higher depending on your circumstances. Joint applications take both incomes into account.

Should I use a mortgage broker or go directly to a lender?

A mortgage broker has access to a wide range of lenders, including some not available directly to the public. They compare deals across the market and recommend the most suitable option for your circumstances. Going directly to a single lender means you only see that lender’s products.

Do first-time buyers pay stamp duty?

In England and Northern Ireland, first-time buyers benefit from stamp duty relief on properties up to a certain threshold. The rules have changed in recent years and the thresholds do shift, so it is always worth checking the current rates before you budget. Scotland and Wales each have their own land taxes with their own relief schemes. Speaking to a broker or conveyancer will give you a clear picture of what you will owe based on your purchase price.

What is the difference between a fixed and variable rate mortgage?

A fixed rate mortgage locks your interest rate for a set period, typically two, three, or five years, meaning your monthly payments stay the same regardless of what happens to the Bank of England base rate. A variable rate mortgage can go up or down in line with market conditions. Fixed rates offer certainty and protection against rate rises; variable rates can be lower to start but carry more risk if rates increase. Most first-time buyers go for a fixed rate deal for the stability it provides.

How long does the mortgage application process take?

From application to completion, the process typically takes between four and twelve weeks, depending on the complexity of your situation and how quickly all parties move. Getting your documents together early, obtaining a mortgage in principle, and working with an experienced broker can all help keep things on track.

What is a mortgage in principle and do I need one?

A mortgage in principle (sometimes called a Decision in Principle or Agreement in Principle) is a conditional statement from a lender indicating how much they may be willing to lend you. It is not a guarantee, but it shows estate agents and sellers that you are a serious buyer. Many sellers will not entertain an offer without one.

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Ready to Find Out Where You Stand?

If this article has got you thinking, the next step is a simple one. Have a conversation with someone who can give you a real, honest answer based on your situation.

Get in touch with the WIS Mortgages team and let us help you understand what is possible for you. The first conversation costs nothing, and it could be the one that changes everything.

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Compliance and Regulatory Notice

WIS Mortgages is authorised and regulated by the Financial Conduct Authority (FCA). This article is intended for information purposes only and does not constitute financial advice. The content should not be relied upon as a substitute for professional financial guidance tailored to your individual circumstances.

Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home.