In short: Your First Home is a government equity loan for first-time buyers purchasing a qualifying new-build home in England from a participating developer, to live in as their main home. You put down at least 2.5%, the government lends 20% of the price, and a participating lender provides a repayment mortgage for the rest. The scheme was confirmed in the Budget and the government's scheme guidance, both published on 28 October 2026. You cannot apply yet, and full eligibility rules, participating developers and lenders have not been published.
What has been confirmed, and what is still to come?
The Budget set out the headline policy and funding. The scheme guidance gives more operational detail, including the interest rates after year five, example price caps and the timetable. Where a point appears in only one, the table says so.
| Detail | Position | Source |
|---|---|---|
| Deposit | At least 2.5% of the price. The Budget also sets a maximum deposit of 15%. | Guidance (minimum); Budget (minimum and maximum) |
| Equity loan | 20% of the purchase price. | Guidance and Budget |
| Equity loan interest | 0% in years 1 to 5, 1.5% in year 6, 3% from year 7. | Guidance (the Budget only says a "gradual increase") |
| Income cap | £110,000 household income outside London; £140,000 in London. | Guidance and Budget |
| Price caps | Local caps based on local authority median prices; £650,000 inner London and £500,000 outer London. Only a few other areas have been published so far. | Budget (basis, London); guidance (examples) |
| Repayment | Normally the same share of the home's value when repaid, based on an independent valuation. | Guidance |
| Timetable | Pre-registration and guidance by the end of December 2026; first applications February 2027; first sales April 2027. These are expected dates. | Guidance |
| Still to be published | Full eligibility rules and terms, the full list of price caps, participating developers and lenders, how interest is collected, and repayment rules (minimum amounts, valuations, fees, remortgaging). | Guidance |
The government has funded the scheme at £4.7 billion over five years and says funding will be capped each year, with demand kept under review. That means places on a particular development are not guaranteed even once the scheme opens.
Who can use Your First Home?
According to the guidance, buyers will normally need to:
- be a first-time buyer
- buy a new-build home in England from a participating developer, within the local price cap
- live in the property as their main home
- have a total annual household income of no more than £110,000 outside London, or £140,000 in London
- get a repayment mortgage from a participating lender
The full eligibility rules have not been published yet, so points such as joint applicants with one previous owner, gifted deposits, previous ownership overseas or particular residency statuses are not settled. Meeting the scheme rules also does not mean a lender will offer you a mortgage. Lenders will still carry out their own affordability and credit checks.
Which homes and areas qualify?
Only new-build homes sold by developers taking part in the scheme. Each local authority area will have a price cap. The government has published some examples so far, with a full list to follow:
| Area | Price cap |
|---|---|
| Inner London | £650,000 |
| Outer London | £500,000 |
| Reading (example) | £375,000 |
| Manchester (example) | £355,000 |
| North Devon (example) | £320,000 |
| Middlesbrough (example) | £220,000 |
The non-London figures are examples, not a complete list. If your area is not shown, including Newcastle and the wider North East, its cap has not been published yet. A home priced under a cap still only qualifies if the developer is taking part and the home meets the full rules. Existing (second-hand) homes and homes in Scotland, Wales and Northern Ireland are not covered.
How would a £300,000 purchase be funded?
This illustration uses the minimum 2.5% deposit, and matches the government's own example:
| Funding source | Amount | Share |
|---|---|---|
| Your deposit | £7,500 | 2.5% |
| Government equity loan | £60,000 | 20% |
| Repayment mortgage | £232,500 | 77.5% |
| Purchase price | £300,000 | 100% |
A bigger deposit reduces the mortgage, not the equity loan. With a 10% deposit (£30,000) on the same home, the mortgage would be £210,000. At the 15% maximum deposit the Budget mentions (£45,000), it would be £195,000. Not everyone will borrow 77.5%.
What could the monthly payments look like?
The government's example assumes a £300,000 home, a 30-year repayment mortgage at 5% and no repayment of the equity loan. The standard comparison uses a 5% deposit and a £285,000 mortgage; Your First Home uses a 2.5% deposit and a £232,500 mortgage. The figures are rounded to the nearest pound.
| Period | Standard 95% mortgage | Your First Home mortgage | Equity loan interest | Your First Home total |
|---|---|---|---|---|
| Years 1 to 5 | £1,530 | £1,248 | £0 | £1,248 |
| Year 6 | £1,530 | £1,248 | £75 | £1,323 |
| From year 7 | £1,530 | £1,248 | £150 | £1,398 |
Equity loan interest is worked out on the £60,000: 1.5% is £900 a year (£75 a month) and 3% is £1,800 a year (£150 a month). It is paid separately from your mortgage and does not reduce what you owe on the equity loan.
The figures exclude mortgage fees, insurance, council tax, service or estate charges and maintenance. Use our mortgage repayment calculator to try your own figures. Budget separately for legal fees, surveys, moving and any stamp duty; see the government's stamp duty guidance.
How is the equity loan repaid?
The equity loan is not free money or a 20% discount. It is a loan linked to your home's value. The guidance says that if the loan was 20% of the purchase price, you will normally repay 20% of the home's value at the time you repay, based on an independent valuation.
| Later valuation | 20% repayable | Change from £60,000 |
|---|---|---|
| £320,000 (value rises) | £64,000 | +£4,000 |
| £300,000 (no change) | £60,000 | £0 |
| £280,000 (value falls) | £56,000 | −£4,000 |
You would normally repay when you sell. The guidance says you will also be able to repay some or all of it earlier. The rules on minimum repayments, valuations, fees and what happens when you remortgage have not been published yet.
Should I wait for Your First Home or buy now?
This is the question we expect to hear most. The honest answer depends on your deposit, the kind of home you want and how long you can wait. Here is how we would compare the two routes with you.
| Point to compare | Your First Home (expected from 2027) | Standard first-time buyer mortgage now |
|---|---|---|
| Homes | Qualifying new builds from participating developers, under a local cap | New builds and existing homes, subject to lender criteria |
| Deposit | From 2.5%, up to 15% | Usually from 5%, with more choice at 10% or more |
| Mortgage size | Smaller, as 20% comes from the equity loan | Larger, up to 95% of the price |
| Monthly cost in years 1 to 5 | Mortgage payment only | Mortgage payment only, on a bigger loan |
| Monthly cost after year 5 | Mortgage plus equity loan interest (1.5% then 3%) | Mortgage payment only |
| When you sell or remortgage | Repay 20% of the value at the time (rules on remortgaging pending) | Repay the mortgage balance only |
| Property price | New builds can carry a premium that may not hold on resale | Wider choice to compare value |
| Fees and charges | Mortgage and product fees, plus any scheme fees still to be confirmed; check service or estate charges on new developments | Mortgage and product fees; service or estate charges where they apply |
| Lender decision | Participating lenders still check affordability and credit | Lenders check affordability and credit |
| Timing | First sales expected April 2027, subject to funding and developer places | Available now |
Waiting may make sense if a 5% deposit is genuinely out of reach, you would happily buy a new build within your local cap, and you can wait until at least spring 2027. In that case, use the time to save, tidy up your credit file and ask developers whether they plan to take part.
Buying now may make sense if you already have a 5% deposit or more, you want an existing home, or your rent is high enough that another year of waiting costs you more than it saves. Delaying also carries risks: prices, rates and your own circumstances can change, and scheme places are limited.
Either way, being eligible for the scheme does not guarantee a mortgage offer. We can look at what you could do now, and what would need to be true for Your First Home to suit you later. We cannot reserve a scheme place, and participating lenders have not been announced yet.
What can first-time buyers do now?
- Check your budget. Use our affordability calculator for an indicative range. It is not a lender decision.
- Watch for pre-registration. The government expects to open it by the end of December 2026. Pre-registering is not a mortgage application and does not commit you to buy.
- Check any new build before reserving. Our new-build mortgage guide has a pre-reservation checklist. Do not assume a development is taking part until it is officially confirmed.
- Compare the wider options. Our first-time buyer mortgage guide and government schemes guide cover the alternatives.
Frequently Asked Questions
- Is Your First Home open for applications now?
- No. The scheme was confirmed on 28 October 2026, but applications are not open. The government expects to open pre-registration by the end of December 2026, with first applications in February 2027 and first sales in April 2027. These are expected dates, not guarantees.
- How much deposit do I need for Your First Home?
- At least 2.5% of the purchase price, so £7,500 on a £300,000 home. The Budget also sets a maximum deposit of 15%. A bigger deposit reduces the mortgage you need; the equity loan stays at 20%. You will also need money for buying costs such as legal fees and surveys.
- What are the income limits?
- Total annual household income of no more than £110,000 outside London, or £140,000 in London. The full eligibility rules are still to be published.
- Which homes and areas qualify?
- New-build homes in England from participating developers, within the local price cap. The caps are £650,000 for inner London and £500,000 for outer London. The government has published only a few other examples so far, such as Reading £375,000, Manchester £355,000 and Middlesbrough £220,000. A full list is due. Existing homes do not qualify.
- What happens to the equity loan after five years?
- Interest starts. Under current government guidance, it is 1.5% in year 6 and 3% from year 7. On a £60,000 loan that is about £75 a month in year 6 and £150 a month from year 7. The interest is paid separately from your mortgage and does not reduce the loan.
- Do I repay the original £60,000 or 20% of the home's later value?
- Normally 20% of the value when you repay, based on an independent valuation. If a £300,000 home is later worth £320,000 you would repay £64,000; if it is worth £280,000 you would repay £56,000.
- Can I repay the equity loan early or remortgage?
- The guidance says you will be able to repay some or all of the loan before selling. The rules on minimum repayments, valuations, fees and remortgaging have not been published yet.
- Is this the same as First Homes or the former Help to Buy?
- No. First Homes is a separate scheme that sells certain homes at a 30% to 50% discount with resale restrictions. Help to Buy: Equity Loan closed to new applications in 2022. Your First Home is a new equity loan scheme with its own rules.
- Can I use a Lifetime ISA with Your First Home?
- Not confirmed. The government has not said whether or how a Lifetime ISA can be used alongside Your First Home, so check before planning around it. The Budget separately announced a new First Time Buyer ISA from April 2029, which is a different product from Your First Home.
- Will I automatically get a mortgage if I qualify for the scheme?
- No. Participating lenders will still assess your income, spending, credit history and the property before making a lending decision.
Sources & References
- Your First Home — Ministry of Housing, Communities and Local Government
- Budget 2026 — HM Treasury
- First Homes scheme — GOV.UK
- Help to Buy: Equity Loan — GOV.UK
- Lifetime ISA — GOV.UK
- Stamp Duty Land Tax residential rates — GOV.UK
Need Expert Advice?
Speak to one of our mortgage advisers for free, personalised guidance.
Get Your Free Quote