25th October 2026
For many young people, buying a first home is a long-held ambition. Years of saving, help from family and careful budgeting may finally make it possible to get onto the property ladder. But new figures from property agent Hamptons provide a warning: buying a home does not necessarily mean lower monthly housing costs, particularly for those with small deposits.
Hamptons reports that in September 2026, 56% of first-time buyers were paying more each month on their mortgage than they had previously paid in rent. The average difference among these buyers was £39 a month, or £468 a year. That compares with 33% of first-time buyers in September 2022.
The figures underline how much the financial calculation involved in buying a home has changed. They also raise questions about the risks facing people who stretch their finances to secure a property.
Why a small deposit matters
Buyers with small deposits usually need to borrow a larger proportion of the property's value. Someone putting down 5% or 10% may therefore face a higher mortgage interest rate than a buyer with a deposit of 20% or more.
The Hamptons figures highlight this difference. Buyers whose mortgage payments were higher than their previous rent had an average deposit of around 9%, compared with 17% among those whose mortgage was cheaper than their rent.
A small deposit is not necessarily a mistake. For many people, particularly those without family wealth, saving a large deposit while paying rent is extremely difficult. Waiting several more years may mean paying more rent and potentially facing higher house prices.
But borrowing more leaves less room for financial setbacks. A household that has borrowed close to the maximum a lender will allow may have little spare income when an unexpected bill arrives.
There is also the risk that property prices fall. With only a small deposit, even a modest decline in the value of a home can wipe out much of the buyer's initial equity. If the property must then be sold, the proceeds may not be enough to repay the outstanding mortgage and cover selling costs.
This is not an inevitable outcome, and property prices can rise as well as fall. However, buyers need to understand that a house is both a home and a substantial financial commitment.
Interest rates could make matters worse
Mortgage rates are influenced by the Bank of England's interest rate decisions, financial markets and lenders' own funding costs. They can rise even when the Bank has not increased its official rate.
The continuing uncertainty over energy prices and international conflicts adds another complication. If oil and gas prices remain high, inflation could prove more persistent, potentially delaying interest rate cuts or putting renewed upward pressure on borrowing costs.
For homeowners with fixed-rate mortgages, an increase in market rates will not usually affect their monthly payments immediately. The difficulty often arrives when their existing deal expires and they need to refinance.
Those with variable-rate mortgages may be affected sooner, depending on the terms of their loan.
First-time buyers should therefore avoid assuming that today's mortgage rate will remain available throughout the life of their borrowing. A mortgage that looks manageable at one interest rate may become uncomfortable at another.
Can you really afford the house?
Mortgage lenders assess whether borrowers can afford their repayments, but passing a lender's affordability checks does not guarantee that a household will find the payments comfortable.
Buyers need to consider the whole cost of living in their new home. Mortgage payments are only part of the bill. Council tax, energy, water, insurance, repairs, maintenance and transport can all add significantly to monthly expenditure.
A property that is cheap to buy may also need a new boiler, roof repairs or other work that cannot easily be postponed.
Before committing, buyers should calculate what their finances would look like if mortgage rates rose, energy bills increased or one household income was temporarily lost. They should also consider whether they could manage an unexpected repair without relying on expensive credit cards or loans.
Keeping some savings available after paying the deposit and purchase costs is particularly important. Putting every available penny into the purchase may secure the keys, but it can leave the new homeowner vulnerable from the outset.
Renting is not always throwing money away
There is considerable pressure on young people to buy as soon as they can. Renting is sometimes portrayed as money wasted, because the tenant does not build up ownership of a property.
That is too simplistic. Renting provides somewhere to live without the same responsibility for major repairs or the financial exposure associated with owning a property. Buying can build wealth over time, but it also involves interest payments, maintenance costs and the risk of falling property values.
The right decision depends on individual circumstances, including how long someone expects to stay in the property, the local housing market and the stability of their income.
For some people, buying now with a modest deposit will be a sensible long-term decision. For others, waiting until they have a stronger financial cushion may reduce the risks, even if that means renting for longer.
A warning, not a reason to give up
The Hamptons figures should not discourage all first-time buyers. They should encourage people to look beyond the headline mortgage payment and consider what happens if circumstances change.
A small deposit can open the door to home ownership, but it also means a larger debt and less protection against falling house prices. If interest rates rise again, or other living costs continue to climb, those who have stretched themselves furthest may feel the greatest pressure.
Buying a home should be about securing a stable place to live, not simply getting onto the property ladder at the earliest opportunity.
The sensible test is not whether a lender will approve the mortgage. It is whether the buyer can afford the home comfortably, maintain it properly and cope with a difficult year without falling into debt.
Getting the keys is a milestone. Being able to afford to keep them is what really matters.