The Burrow
Dec 18, 2025
Buying a home for the first time is a huge milestone, and one that should absolutely be celebrated with pomp and fanfare once you’ve moved in fully. However, as you probably already know, rising housing prices are making big purchases like these quite the challenge.
Simply put, first-time buyers need an affordable, stable and accessible market; the combination of all three being quite hard to come by, and it’s why finding places with government incentives, affordable housing prices, lower mortgage rates, and a manageable deposit-to-income ratio is absolutely essential.
The home loan comparison experts at Compare the Market have surveyed numerous countries from around the world to uncover which nations had the best cities for first-time home buyers, delving into all the details that make our top picks such good choices!
Based on the data from our survey, we found that the best countries for first-time homebuyers were Sweden, Chile, Poland, Lithuania, and Latvia. All scoring above 75 points, these European countries were some of the few with balanced and affordable housing, as well as sustainable price growth rates and a low cost of living.
However, even outside of our top 5, there were a number of interesting stats that caught our eye:
With our top 5 countries to hand, let’s now look at our number 3 in detail to see what makes them such a promising option for new house hunters.
Scoring a whopping 79.07 overall, Sweden is the best place on our list for first-time buyers to get into the housing market. This score owes itself primarily to low mortgage rates at just 2.83%, and a very low average house price increase since 2015, with house prices rising by just 1.9% overall.
The average house price in Sweden is also reasonably good at USD$389.760, and its cost of living index score sits at a respectable 62.8. Not only that, but its price-to-income ratio is an excellent 12.1, marking it as one of the best on our list.
Add to this an envious mortgage credit interest rate of 2.83%, and the general stability of Sweden’s housing market, and it’s really no surprise that Sweden came out on top.
Close behind Sweden, we have Chile, which scored a total of 78.45. Home to the second-lowest average house prices ($112,000) and the lowest cost of living index overall (35.8), Chile has a lot going for it when it comes to first-time buying potential.
Mortgage rates, in particular, are surprisingly low at 4.21%, while the deposit-to-income ratio is an accessible 1.2. In fact, our survey shows that the average homeowner only spends an average of 17.9% of their disposable income on mortgage payments, further throwing light on the affordability of property in this country in comparison to other parts of the world.
Finally, taking third, we have Poland. Clocking in with a score of 77.43, Poland’s most notable stat lies in its high rate of housing construction, with an average increase in home numbers of 1.5% since 2022.
And while its above-average housing price of $257,519 does knock it down somewhat, its low cost-of-living index score (43.7) and minimal disposable income mortgage spending (14.4%) help to keep Poland well above many of the other countries we examined.
On the flipside, the countries with the least accessible markets for first-time buyers include Switzerland, Luxembourg, Portugal, Hungary and Denmark. Combining a high cost of living with steep price-to-income ratios and expensive deposits, here are some stand-out data points we noticed:
Sitting right at the bottom of our table, Switzerland scored almost half of what Sweden did, with a total score of just 40.41. With an insane average home price of $1,749,279 and a ludicrously high cost of living score of 106.8, Switzerland is definitely the hardest market for first-time buyers to get into.
Fascinatingly, however, Switzerland also had some of the lowest interest rates we saw, sitting at 1.83%, though this doesn’t necessarily do much to allay the sheer size of the mortgage new buyers might need to take out.
Indeed, while income might be high in this country, rising house prices since 2015 (29.5%) and larger deposits and mortgage repayments may make it ill-suited for anyone looking to get on to the first step of the property ladder.
Unlike Switzerland, Luxembourg also has one of the biggest mortgage burdens on disposable income on our list at 31.8%, not to mention similarly pricey homes at $1,079,960 – both of which are going to be major barriers for anyone buying their first home.
In fact, the average cost of a 2-bed home is the third highest across all the 33 countries we ranked, not to mention seeing a substantial 30.8% rise in housing prices in the last decade. Add to this a high cost-of-living index score of 73.5, and Luxembourg marks itself as an expensive market with lower accessibility for first-time home buyers.
Lastly, wrapping out our bottom 3, we have Portugal. The country with the second-highest rate of house price increases (currently sitting at 81.1% and only being beaten by Hungary’s 82%), Portugal is absolutely not the place to be for those hunting for their first home.
Indeed, a full 23.4% of disposable household income in Portugal goes on mortgage payments, and despite a reasonable mortgage rate of 3.99% and a low cost of living score of 45.8, Portugal’s high house prices ($748,200 on average) put it firmly at the bottom of our list.
As you can see, navigating the first-time home-buying process varies by country, but at its heart, the core principles remain the same. Discussing our findings, Stephen Zeller, General Manager of Money at Compare the Market, says comparing home loan options first is critical.
“Several countries have grants and assistance programs to help first time buyers get their first home, and people wanting to buy their own home should definitely see what they’re applicable for.
“Additionally, buyers should compare home loan options when applying for a mortgage – whether they’re a first-time buyer or not, and regardless of any government assistance they’re eligible for. This is perhaps the biggest investment most people will ever have in their lifetime so it’s crucial to look at options first.
“Comparing interest rates and fees can have a massive difference on the cost of a home loan over the decades that people can hold it for. It’s also extremely valuable to compare options first to see if the loan has features like free redraw facilities or off-set accounts.
“Anything that can help save money is important to look for when getting a mortgage. First home buyers might be excited and want to move quick to get their first home, but it’s important to slow down and compare home loans first.”
This dataset ranks 33 countries based on how good they are for first-time buyers using 8 key factors. Each factor’s data was collected and normalised to a score between 0 and 1. If data were missing, a score of 0 was given. These scores were then combined to give each country a total score out of 100, and countries were ranked from highest to lowest.
The ranked factors used, and the sources for the data, are as follows:
The factors were weighted as follows:
All data is correct as of 20/11/25. The ranking data shown is a compilation of multiple data sources and may not be representative of real life. All data is accurate with regard to the sources provided.