Your First Home

What Your First Home Is

Your First Home (gov.uk) is a new government scheme to help first-time buyers in England buy a 'new-build' home with a smaller deposit and a smaller mortgage. We are still waiting for details of what 'new-build' will mean under this scheme, and will update this guide once we know.

You buy using 3 pieces:

A deposit of at least 2.5% of the price
A repayment mortgage from a participating lender
A government equity loan worth 20% of the price, interest free for 5 years

It is not shared ownership. The home is 100% yours from the day you complete, subject to your mortgage and the equity loan. The government is not a joint owner and is not your landlord.

Not open yet

Applications are expected to open in February 2027, and the scheme can only be used for purchases from April 2027. Pre-registration is due before the end of December 2026. Full rules, participating developers and lenders, and the complete list of price caps are still to be published. Last checked against gov.uk on 28 October 2026.

How the Numbers Work: a £300,000 Home

This is the government's own example.

Source of money	With Your First Home	With a standard 95% mortgage
Your deposit	£7,500 (2.5%)	£15,000 (5%)
Government equity loan	£60,000 (20%)	None
Repayment mortgage	£232,500	£285,000
Total price	£300,000	£300,000

Who It Is For

The scheme is for first-time buyers, who buy a new build within the local price cap as their main home, where their household income is not more than £110,000 (£140,000 in London), and who are able to get a participating lender's mortgage.

Lenders will still carry out their normal affordability and credit checks. Full eligibility rules will be published before applications open.

Price Caps

Each area will have a maximum price, so the scheme supports modest homes. The full list by council area is still to be published. Examples so far:

Area	Price cap
Inner London	£650,000
Outer London	£500,000
Reading	£375,000
Manchester	£355,000
North Devon	£320,000
Middlesbrough	£220,000

Monthly Costs for the Equity Loan

The equity loan is interest free for the first 5 years. After that, interest is charged on it. Interest payments are separate from your mortgage and do not reduce what you owe on the equity loan.

Years 1 to 5: 0%
Year 6: 1.5%
From year 7: 3%

The government's illustration below assumes a £300,000 home, a 30-year repayment mortgage at 5%, a £60,000 equity loan that is not repaid during the period shown, and a 2.5% deposit (5% for the standard mortgage). It is not a mortgage quote and leaves out other costs such as mortgage fees, insurance, council tax, service and estate charges and maintenance.

Period	Standard 95% mortgage	Your First Home mortgage	Equity loan interest	Total each month
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

How the Equity Loan Works

When you repay the equity loan to the government, you repay 20% of the home's value at the time, so it goes up or down with the price.

If your £300,000 home is later worth £320,000, you repay £64,000 (£4,000 more than you borrowed)
If it is later worth £280,000, you repay £56,000 (£4,000 less)

You normally repay when you sell, and you can repay some or all of it earlier. An independent valuation may be needed. Details on minimum repayments, valuations, fees and remortgaging will be published before the scheme opens.

Before You Apply

Think through:

Whether you can afford the mortgage now, and if rates go up
The equity loan interest from year 6
Legal and mortgage fees
Council tax, insurance and maintenance
Service charges or estate charges, which are common on new builds
The costs of selling or remortgaging later

The government strongly suggests getting independent financial and legal advice before you commit. A good place to start is an FCA authorised mortgage broker.

Developers Taking Part

Only homes from developers who sign a participation agreement will qualify. Developers pay a fee on each home sold through the scheme: 1% on their first 100 homes a year, 3% on homes 101 to 250, and 4% above 250. Smaller builders therefore pay less. It is worth keeping an eye on whether these fees show up in asking prices or incentives.

How Is This Different From First Homes and Help to Buy?

These three are easy to mix up.

	Your First Home	First Homes	Help to Buy (closed)
How it helps	20% equity loan, 2.5% deposit	30% to 50% off the price, for good	20% equity loan (40% London), 5% deposit
Do you repay the help?	Yes, 20% of the value when you repay	No, but the discount passes to the next buyer	Yes, same share of the value
Income limit	£110,000 (£140,000 London)	£80,000 (£90,000 London)	None
Status	Opens 2027	Running	Closed to new buyers

Frequently Asked Questions

When does Your First Home open?

Pre-registration is due before the end of December 2026, applications are expected from February 2027, and it can only be used for purchases from April 2027.

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.

Is Your First Home shared ownership?

No. The home is 100% yours from day one, subject to your mortgage and the 20% government equity loan.

What is the income limit for Your First Home?

Household income of £110,000 or less outside London, or £140,000 or less in London.

Do I pay interest on the equity loan?

Not for the first 5 years. Then 1.5% in year 6 and 3% from year 7, paid separately from your mortgage.

Can I buy any home with Your First Home?

Only a new build from a participating developer, within the local price cap, as your main home. We are still waiting for details of what 'new-build' will mean under this scheme.