Mortgages in Scotland

A Brief Introduction for Buyers and Sellers

Whether you’re a first time buyer or someone with a lot more experience, the financial decisions you’re making now will have a ripple effect on your day-to-day finances for many years to come.
We strongly recommend consulting with a trusted independent financial advisor or mortgage broker for personalized guidance tailored to your specific circumstances. Aside from potentially saving you money, they can often save time and remove much of the stress that goes with making multiple applications.

For a referral, please use this:  Contact Form

In the meantime, here is a very brief outline of some considerations for property buyers and sellers:

For Buyers

Mortgage Deposits

In Scotland, most lenders require a minimum 5% deposit for mainstream mortgages. For a £300,000 property, you’d need at least £15,000 as a deposit. Larger deposits can often secure better interest rates.

Borrowing Capacity

Lenders typically offer between 3 to 5 times your annual income. The exact amount depends on your individual circumstances and the lender’s criteria.

First-Time Buyer Benefits

First-time buyers in Scotland may be eligible for tax relief when acquiring a dwelling, subject to certain conditions.

Mortgage Agreement in Principle (AIP)

An AIP is a personalised indication of how much you may be able to borrow. It’s free, takes less than ten minutes to complete, and has no impact on your credit score. An AIP can strengthen your position as a buyer when viewing properties.

Mortgage Process

1.  Obtain an AIP
2.  Full mortgage application and credit checks
3. Property valuation
4. Mortgage offer
5. Legal work (conveyancing)
6.  Completion and fund transfer

Home Reports

In Scotland, sellers must provide a Home Report which includes a survey, Energy Performance Certificate, and Property Questionnaire. This can impact the mortgage process for potential buyers.

For Sellers

Discharging Existing Mortgages

When selling, any outstanding mortgage must be paid off from the sale proceeds. Your solicitor will handle this process.

Home Reports

As a seller in Scotland, you’re legally required to provide a Home Report. This includes a single survey, an energy report, and a property questionnaire.

Current Market Trends
At the time of writing, February 2025:

• UK Finance predicts an 11% rise in gross mortgage lending during 2025, to £260 billion.
• A 10% rise in residential lending to £148bn is forecasted.
• The mortgage guarantee scheme is expected to accept applications until 30 June 2025, allowing buyers to purchase homes with just a 5% deposit.
• Several major banks are offering 95% LTV mortgages, making it easier for buyers with smaller deposits to enter the market.

Remember, mortgage terms and conditions can vary between lenders. Always seek professional advice before making any financial decisions.

Glossary of common mortgage terminology