Your First Home: Your questions answered

Your First Home, in brief

Today's Budget confirmed Your First Home, a government equity loan that lets first-time buyers in England buy a new build home (we are still waiting for what this means) with a deposit from 2.5%. 

Pre-registration is due to open by the end of December 2026, with full applications from February 2027 and the first loans from April 2027.

Here, we answer the questions that are already being asked and compare it to both Help to Buy schemes (now redundant) and First Homes below. 

Each Your First Home figure here is as reported on Budget day (28 October 2026). The detailed scheme rules are not out yet, and some details may change.

What is Your First Home?

It is an equity loan: the government lends you up to 20% of the price of a new build home, and you fund the rest with your deposit and a mortgage. Unlike a discount, an equity loan has to be repaid.

• Deposit: from 2.5% of the price.
• Equity loan: up to 20% of the price, wherever you buy in England. There is no higher London rate, unlike the old Help to Buy.
• Mortgage: the balance; with a 2.5% deposit, that will be 77.5% of the price, and if it is, say, a 10% deposit, it will be 70% of the price.
• Interest on the equity loan: none for the first five years, after which charges rise gradually. The starting rate and how it rises have not been published.
• Scale: there will be £4.7 billion of government-backed lending, which the government expects to help around 70,000 households.

Am I eligible?

On what was confirmed at the Budget, you will need to:

• be a first-time buyer;
• have a household income below £110,000, or £140,000 in London;
• buy a new build home in England from a developer signed up to the scheme; and
• buy within the local price cap for the area.

The full rules, including exactly how "first-time buyer" and household income will be defined, are still to come. If the scheme follows Help to Buy, expect the home to have to be your only residence and an affordability check before you can proceed.

How much can I spend?

Your First Home caps are set for each local authority area: £375,000 in Reading and £220,000 in Middlesbrough, for example, with £650,000 in inner London and £500,000 in outer London. 

What would it look like on a real purchase?

An illustration on a £300,000 new build, with the minimum deposit:

Your deposit: 2.5% = £7,500

Government equity loan: 20% = £60,000

Your mortgage: 77.5% = £232,500

Price (100%) = £300,000

As a first-time buyer you would pay no Stamp Duty Land Tax on this purchase, because first-time buyer relief applies to the first £300,000. 

Under both previous Help to Buy schemes the loan was a percentage of your home's value, not a fixed sum. If your home rose in value, you repaid more; if it fell, you repaid less. Your First Home works the same way.

What will the equity loan cost ?

Its loan is interest-free for five years, then charged at 1.5% in year 6 and 3% from year 7. 

For comparison, both Help to Buy schemes charged 1.75% of the original loan in year six, rising every year after that: by RPI plus 1% under the 2013 to 2021 scheme, and by CPI plus 2% under the 2021 to 2023 scheme. On a £60,000 loan, 1.75% is £1,050 a year. Interest payments will not reduce what you owe.

When and how can I apply?

The timetable announced at the Budget is that by the end of December 2026, Developer pre-registration will open, and full applications in February 2027, and the first equity loans issued in April 2027.

The application process itself has not been published. Under Help to Buy, you reserved a home with a registered builder, a Help to Buy agent checked your eligibility and affordability, and you received an "Authority to Proceed" before applying for your mortgage. A similar route seems likely, but we’ll have to wait for the official guidance.

In the meantime, you can get ready:

• Build your deposit. Even at 2.5%, you will also need money for legal fees, surveys, moving and furnishing.
• Check your credit file and correct any errors now, not in February.
• Work out your household income for the cap, and what a mortgage of say, 77.5% of your target price would cost each month.
• Look at the developments near you, so you know which builders to watch for when the list of participating developers is published.

The Budget also announced changes to the Lifetime ISA and a new First-Time Buyer ISA; I will cover those in a separate issue.

How do I pay it back, and can I sell or let the home?

The repayment and ownership rules have not yet been published. Help to Buy is the best guide to what to expect:

• Repayment: the loan was repaid when you sold, after 25 years, or earlier if you chose. You repaid the same percentage of the home's value at that time as you originally borrowed.
• Repaying in stages: you could repay part of the loan early, in steps of at least 10% of the home's value.
• Letting: you could not let the home out without first repaying the loan, save in exceptional cases.
• Alterations and extra borrowing: both needed consent, and significant improvements were not usually allowed.

Expect similar conditions under Your First Home, and read the actual terms carefully before you reserve.

Does a converted flat count as a "new build"?

This has not been confirmed for Your First Home.

The 2013 to 2021 Help to Buy scheme was strictly for homes on new build developments sold by registered house builders. Conversions only came in with the 2021 to 2023 scheme, which defined a new build as including converted commercial premises and conversions of buildings that had never been used as homes. A flat in a former office or barn could therefore qualify. Although the guide stated that properties split into flats did not count as new builds, I understand from a solicitor who acted on these purchases that, in practice, units created by splitting a building were often treated as new homes that had never been lived in, and so qualified. What was always excluded was any home that had been lived in before.

Your First Home is described so far only as covering new builds from participating developers, and no definition of "new build" has been published. It may follow the 2021 to 2023 wording, which would let qualifying conversions in. Even then, a home will only qualify if its developer has signed up to the scheme, so not every conversion will be offered.

If you are viewing a converted flat and are told it will qualify, ask the agent to confirm in writing once the detailed rules are published.

How does it compare with Help to Buy and First Homes?

Your First Home is being described as the new Help to Buy, and the structure is similar. There are differences though.

How they work

The three equity loan schemes work in broadly the same way. Your First Home lends 20% of the price. Both Help to Buy schemes lent up to 20%, rising to 40% in London (from 2016 under the original scheme). First Homes is different; rather than a loan, it gives a permanent discount of 30% to 50% off market value.

Who qualifies?

Who can use them has reduced over time. The original Help to Buy (2013 to 2021) was open to any buyer, provided the new home would be their only home. Its 2021 to 2023 successor, Your First Home and First Homes are all for first-time buyers only. Neither Help to Buy scheme had an income cap; affordability was checked instead. Your First Home caps household income at £110,000 (£140,000 in London), and First Homes at £80,000 (£90,000 in London).

What you can buy?

The original Help to Buy was strictly for new build developments from registered builders. The 2021 to 2023 scheme widened this to include converted commercial premises and conversions of buildings never used as homes (it expressly excluded properties split into flats). Your First Home covers new builds from participating developers, but whether conversions count is not yet confirmed. First Homes covers new builds and resales of existing First Homes.

Deposits

Your First Home asks for just 2.5%, half the 5% minimum under both Help to Buy schemes. First Homes sets no national minimum deposit, but your mortgage must cover at least half the price.

Price caps

Price caps vary widely. Your First Home caps are set for each local authority area: £375,000 in Reading and £220,000 in Middlesbrough, for example, with £650,000 in inner London and £500,000 in outer London. Help to Buy 2021 to 2023 used regional caps, from £186,100 in the North East to £600,000 in London. The original scheme had a single £600,000 cap everywhere. A First Home cannot cost more than £250,000 after the discount (£420,000 in London).

The cost

The cost of borrowing is where Your First Home is most predictable. Its loan is interest-free for five years, then charged at 1.5% in year 6 and 3% from year 7. Both Help to Buy schemes charged 1.75% from year 6, rising every year after that. The increase was CPI plus 2% under the 2021 to 2023 scheme and RPI plus 1% under the original. First Homes charges no interest, because there is no loan.

Repayment

The equity loans are all repaid on the same principle: you repay the same percentage of your home’s value as you borrowed. Under Help to Buy, that fell due on sale or after 25 years. Under Your First Home, repayment is expected on sale with early repayments allowed, but the detailed terms are still to be published. 

With First Homes nothing is repaid; instead, the discount passes to the next buyer when you sell.

Availability

Both Help to Buy schemes are closed. First Homes is open, though supply is limited. Your First Home opens for pre-registration by the end of December 2026, with applications from February 2027 and the first sales in April 2027.

Interested in First Homes?

Whether Your First Home can be combined with First Homes (see our guide on this for more detail) has not been confirmed. 

Final

 We shall provide more detail on Your First Home once it is available.