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Level 2: Intermediate

Buying your first home: mortgages explained

6 min read · Before you start: Lessons on debt, loan offers and credit reports · Updated 26 October 2026

Key terms in this lesson: credit record · reducing balance · conveyance duty · emergency fund · Stamp duty (all defined in the glossary)

For many people a home is the biggest purchase of their lives, and a mortgage is the biggest loan. A clear plan before you view a single house can save you years of stress.

What a mortgage is

A mortgage is a loan to buy property, secured on that property. If you stop paying, the lender can eventually take the property and sell it to recover the money. That is why lenders check your income, your debts and your credit record carefully.

Step 1: know what you can afford

• Start with take-home pay, not gross pay.
• One widely quoted guide puts the mortgage payment at around 30 percent of take-home pay, so there is room for food, transport, insurance, repairs and savings. Treat that figure as a suggested starting point only, not a target and not a limit. It is a rule of thumb, not a bank rule and not a recommendation from us. Where rent, food and utilities take a large share of income, a payment well below 30 percent may be the one that actually leaves enough to live on; the number that works is the one your own budget supports after every other commitment is counted.
• Lenders also look at the share of your income that already goes to debts. Ask your lender what limit it uses.
• Remember that the payment is only part of the cost of living in a home. Utilities, maintenance and insurance are extra.

Step 2: the deposit

Lenders usually do not finance the whole price. You pay a deposit from your own savings. One local property guide says lenders can finance up to about 90 percent of a property's value, which would mean a deposit of about 10 percent. Lenders differ, so ask each one what it requires. A bigger deposit means a smaller loan and less interest.

Step 3: what the loan really costs

Here is an illustration only, not a quote: a loan of TT$800,000 at 6 percent a year on a reducing balance.

Stretching the loan from 20 to 30 years lowers the payment by about TT$935 a month, but adds about TT$351,000 in interest. The rate matters too. On the 25-year loan, 5 percent means about TT$4,677 a month, and 7 percent means about TT$5,654. Try your own numbers in the loan calculator.

Step 4: the extra costs

• Legal fees for the attorney who handles the purchase and the mortgage.
• Valuation and survey fees, and a property inspection.
• Stamp duty. PwC's Budget 2027 summary lists first-time homeowner conveyance duty as nil up to TT$2 million, 5 percent on the next TT$250,000 and 7.5 percent above that, and lists mortgage deeds of TT$2 million or less as exempt, all as existing rules with no change. Rules can change, so confirm the current position with your attorney or the Board of Inland Revenue. See everyday taxes.
• Insurance. Lenders usually require the property to be insured, and may ask for life cover too.
• Moving, repairs and furniture.

Budget 2026 also listed a first-time homeowner income tax allowance of TT$30,000 a year for five years after buying (as reported by EY). Check whether you qualify.

Step 5: the process

1. Check your credit record and fix any errors.
2. A pre-approval from one or more lenders. Many can estimate in a short time once they have your income and debt details.
3. Shortlist homes and make an offer.
4. Hire an attorney to check the title and deal with the paperwork.
5. Have the property valued and inspected.
6. Receive final approval, sign, and pay the deposit and fees.

Common mistakes

• Borrowing the maximum the bank allows.
• Draining all savings for the deposit and leaving no emergency fund.
• Forgetting extra costs, which can add up to a large amount.
• Comparing only the monthly payment and not the total cost.
• Skipping the attorney's check of the title.

Test yourself

Mark this lesson as done

Not financial advice. This lesson is general education only. See our editorial policy and disclaimer.