Can I Afford a Mortgage? Guide for First-Time Buyers in Wales

It’s time to ask yourself the most important question before you start scrolling Rightmove: Can I actually afford a mortgage?

The answer depends on several factors — your deposit size, monthly income and outgoings, credit history, and the type of mortgage you choose.

If you’re a first-time buyer, don’t panic — it can seem like a lot to figure out, but Smart Move is here to help you every step of the way.

Step 1: Use a Mortgage Affordability Calculator

If you’re unsure how much you can afford to borrow, start with a mortgage affordability calculator.

A calculator estimates how much you could borrow — and what your monthly repayments might look like — based on your income, deposit, interest rate, and loan term.

Try our Mortgage Calculator See your estimated repayments before you start viewing properties.

Your property may be repossessed if you do not keep up repayments on your mortgage.

Step 2: Save for Your Deposit

Saving for a deposit is often the hardest step — but also the most rewarding. The size of your deposit has a huge effect on both how much you can borrow and what interest rate you’ll get.

Smart Move tips to grow your deposit:

• Move back in with family temporarily to cut rent costs.

• Downsize your rental or find a house share to reduce outgoings.

• Review every regular payment — can you cut non-essentials or unused subscriptions?

• Set a clear monthly savings goal and automate it.

• Check if you qualify for Help to Buy – Wales (20% equity loan for new-builds) or Shared Ownership – Wales schemes.

The rule of thumb: the bigger your deposit, the smaller your mortgage and the lower your monthly repayments.

Step 3: Understand Loan-to-Value (LTV)

Your Loan-to-Value ratio (LTV) is the percentage of your home’s value that you’re borrowing.

Example: If your home costs £200,000 and you put down a £40,000 deposit, you borrow £160,000.That’s 80% LTV.

• Lower LTV = Lower risk to the lender = Better interest rates

• Higher LTV = Higher risk = Higher rates

If your LTV is close to a lower “band” (e.g. 90% → 85%), try to increase your deposit slightly. Even a small boost can unlock a cheaper mortgage deal.

Step 4: Analyse Your Income vs Spending

Lenders don’t just look at your salary — they’ll review your whole financial picture to make sure you can afford the repayments.

You’ll need to show that your income comfortably exceeds your monthly expenses.

When you review your budget, include everything, such as:

• Fuel and travel costs

• Supermarket and takeaways

• Coffee, snacks, and lunches out

• Subscriptions and entertainment (cinema, Netflix, Spotify)

• Gym, clothes, hobbies, nights out

• Holidays and childcare

It’s worth doing a three-month spending audit before applying. Small changes (like cutting £100 a month in non-essentials) can make the difference between approval and rejection.

Step 5: Choose the Right Mortgage Provider

Every lender has its own affordability criteria — and not all treat income and expenses the same way.

That’s why using a mortgage broker (like Smart Move) is so valuable. We compare multiple lenders, not just your bank.

Lenders typically assess:

• Income: salary, bonuses, overtime, self-employed profit, or contractor income

• Deposit: the higher your deposit, the lower your perceived risk

• Credit history: past borrowing behaviour

• Monthly commitments: loans, credit cards, childcare, etc.

If you’re self-employed, a contractor, or have fluctuating income, there are specialist lenders who cater for this — we work with them every day.

Schedule a free call with our Mortgage Adviser We’ll help you find a lender that fits your circumstances — not the other way around.

Your property may be repossessed if you do not keep up repayments on your mortgage.

Step 6: Lowering Your Monthly Repayments

Mortgage repayments must be made every month, for the lifetime of the loan — so it’s crucial to get the right balance between comfort and cost.

Options to lower your payments:

• Extend your term: A longer term (up to 35–40 years) lowers monthly payments but increases total interest.

• Increase your deposit: Brings down both rate and payment size.

• Consider overpayments later: Once settled, you can shorten your mortgage by overpaying (if your lender allows it without penalties).

Your mortgage advisor adviser can model different repayment terms to help you find a realistic, sustainable option.

Step 7: Understand Interest Rates

Interest rates are one of the biggest factors in what you’ll pay each month — and they can change over time.

Common mortgage types:

• Fixed-rate mortgage Your rate (and payment) stays the same for a set period — great for budgeting.

• Tracker or variable-rate mortgage Follows the Bank of England base rate, so payments can rise or fall.

• Discount mortgage Linked to a lender’s standard variable rate (SVR), minus a discount for a fixed term.

• Interest-only mortgage You only pay the interest each month, not the capital — you’ll need a clear repayment plan later.

If rates rise, can your budget handle it? A Smart Move adviser will stress-test your affordability so you’re not caught out by future increases.

Step 8: Build and Maintain a Strong Credit Profile

A healthy credit record is key to unlocking the best rates.

Steps to improve your credit rating:

• Register on the electoral roll

• Pay all credit accounts on time

• Stay within your limits on cards and overdrafts

• Avoid multiple new credit applications close together

• Close unused accounts

• Check your credit file regularly (Experian, Equifax, or TransUnion) and fix errors

The stronger your credit history, the more mortgage options you’ll have — and at lower rates.

Step 9: Understand the Risks

Failing to make your mortgage repayments has serious consequences. If you fall behind, your lender may take possession of your home to recover the debt.

Lenders all have different criteria for affordability, so always double-check the numbers before committing.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Step 10: Research Your New Area

Affordability isn’t just about the mortgage itself — it’s about your wider cost of living.

Before committing to a property, check:

• Local schools and Estyn ratings (Estyn.gov.wales)

• Crime rates and neighbourhood demographics

• Transport and commuting costs

• Council Tax band and utility suppliers

• Amenities — shops, gyms, green spaces

A Property Report can give you all this data in one place.

Next Step: Talk to a Mortgage Adviser

If you’ve done your sums and still aren’t sure what’s affordable — don’t guess.

At Martin & Co, we help first-time buyers in Wales to:

• Assess true affordability based on their real income and lifestyle

• Compare lenders, products, and rates across the market

• Access Welsh Government schemes to boost deposits or borrowing power

• Secure a mortgage with confidence and clarity

Schedule a free, no-obligation call with our Mortgage Adviser We’ll help you understand what you can borrow, what it’ll cost, and what’s realistic for your situation.

You may have to pay an early repayment charge if you remortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.