Step 1: Should you buy?


Becoming a homeowner for the first time is one of life’s milestones and for most of us buying a home will be the most expensive purchase we’ll ever make.

There are many factors to take into account.

Are you ready to set down roots in one area? Can you afford the deposit? Do you want the responsibility of buying a home? Are you sure that buying a home suits your lifestyle better than renting?

To help you to make the right decision, take a look at some of the pros and cons.

The pros

  • A place to call your own. Your decoration, your furniture, do what you like to the place. No more ugly rental wallpaper!
  • Investing in your own property. When you rent you’re handing money over to a landlord. When you buy you’re putting money into something for you. As house prices can rise over time you may see a profit on your house when you sell it.
  • Improving your credit rating. By paying your mortgage each month you demonstrate that you’re able to manage your finances. This can improve your credit rating.

The cons

  • Raising a deposit. A mortgage requires a deposit of at least 5% of the value of your property, meaning that you generally have to find a lump sum. Say you needed a 10% deposit on a house costing £150,000 you’d have to find a £15,000 deposit before you could consider buying.
  • Exposure to the housing market. House prices can go down as well as up. The term ‘negative equity’ refers to a situation where the value of a property is less than the mortgage. Homeowners in negative equity are usually reluctant to sell their properties, as they would receive less money than they owe on their mortgage.
  • Financial pressure. When you take on a mortgage you are committing to making your payments every month, no matter what. Failure to keep up mortgage payments if your financial circumstances change could lead to having to sell your property, or at worst, repossession.

Important Information


All applications are subject to status and our lending criteria. This means that the amount we’ll lend you will depend on your individual circumstances, the type of property and the amount you borrow. For example, we may require a bigger deposit if you’re buying a flat or new build property.