Your First Home scheme: what we know so far

Your First Home is a proposed equity loan scheme for first-time buyers purchasing participating new-build homes in England. The government has announced the scheme, but it is not yet open and its full rules have not been published.

The government expects buyers to be able to use a 2.5% deposit alongside a 20% government-backed equity loan, leaving approximately 77.5% to be covered by a mortgage. Further details, including income limits, local property price caps, costs and the implementation timetable, are due at the Budget on 28 October 2026.

What is the Your First Home scheme?

The government announced Your First Home on 26 September 2026. It is intended to help prospective first-time buyers purchase new-build homes in England from participating developers.

Household income limits and local property price caps will apply, while developers will be expected to contribute towards the costs. The figures, detailed costs and implementation dates have not been announced.

Detail	Current position
Country	England
Buyer	Prospective first-time buyers
Property	Participating new-build homes
Buyer deposit	Expected to be 2.5%
Government equity loan	Expected to be 20%
Mortgage requirement	Approximately 77.5%, subject to final rules and lender approval
Interest-free period	Confirmed in principle, but duration unknown
Income limit	Confirmed in principle, but amount unknown
Local property price caps	Confirmed in principle, but amounts unknown
Application date	Not announced

How could the 2.5% deposit and 20% equity loan work?

For an illustrative £300,000 home, the three expected sources of funding could look like this:

Funding source	Percentage	Illustrative amount
Buyer deposit	2.5%	£7,500
Government equity loan	20%	£60,000
Mortgage	77.5%	£232,500
Total	100%	£300,000

This is a mathematical illustration, not a mortgage quotation or confirmation of eligibility. A future local price cap could exclude a £300,000 purchase in some areas, and participating mortgage products have not been published.

The equity loan would not be a gift or deposit grant. The government has not explained how repayments would be calculated, when the loan would become repayable or whether its value would change with the property’s value.

Our guide to how mortgage deposits affect loan-to-value and product choice explains the position with conventional mortgages.

Who could be eligible for Your First Home?

What is currently confirmed

• The scheme is intended for prospective first-time buyers.
• It is being developed for England.
• The property is expected to be a new build bought from a participating developer.
• A household income cap and local property price caps will apply.

What has not been confirmed

• How a first-time buyer will be defined for joint applications.
• Minimum age and residency requirements.
• The exact household income limits.
• The local property price caps.
• Whether buyers can contribute more than 2.5% themselves.
• How gifted deposits will be treated.
• Whether there will be scheme-specific evidence rules for self-employed applicants.
• Any credit-history requirements beyond normal lender underwriting.
• Whether local connections or key-worker status will affect priority.

Scheme eligibility would not guarantee mortgage approval. A lender would still assess income, expenditure, credit commitments, credit history and the property.

When we assess a low-deposit first-time buyer case, we would want to establish whether the scheme rules and the mortgage lender’s criteria both work. Passing one test would not automatically mean passing the other.

When will Your First Home start?

The government says costs and implementation timelines will be announced at the Budget on 28 October 2026, a date confirmed by HM Treasury.

There is currently no official application opening date, application portal, list of participating lenders or list of participating developers. The government’s announcement also does not confirm that buyers will be able to pre-register before the end of 2026.

Buyers can research a realistic budget now, but obtaining an Agreement in Principle too early may not help because decisions generally have limited validity. An Agreement in Principle can indicate an initial borrowing range, but it is not a mortgage offer.

Is Your First Home the same as Help to Buy?

No. It uses a broadly similar equity-loan idea, but it is a separate proposed scheme. The previous Help to Buy: Equity Loan is closed to new applicants in England.

Feature	Your First Home	Previous Help to Buy: Equity Loan
Current status	Announced, not yet open	Closed to new applicants in England
Buyer	Expected to be first-time buyers	Varied by scheme period, with the later version restricted to first-time buyers
Property	Participating new builds	Eligible new builds
Buyer deposit	Expected to be 2.5%	Normally at least 5%
Equity loan	Expected to be 20%	Up to 20% outside London and up to 40% in London under the relevant scheme rules
Interest-free period	Initial period confirmed, length unknown	Five years
Income and price caps	Household income and local price caps expected	Regional property price caps applied to the 2021 to 2023 scheme
Repayment rules	Not announced	Based on the equity percentage and qualifying property value

The old scheme’s rules for interest, repayment and property changes should not be assumed to apply to Your First Home.

Is Your First Home the same as First Homes?

No. Your First Home is a proposed equity loan. First Homes is an existing English scheme that lets eligible buyers purchase for 30% to 50% below market value. The discount remains attached when the home is resold to another eligible buyer.

First Homes has separate national and local criteria. Its eligibility requirements should not be used to predict the rules for Your First Home.

How could Your First Home compare with a 95% mortgage?

The proposed scheme could reduce both the cash deposit and the proportion funded through a mortgage. That does not prove it will cost less over the full period of ownership.

Consideration	Your First Home, proposed	Standard 95% mortgage
Typical buyer cash deposit	Expected to be 2.5%	Commonly at least 5%
Mortgage proportion	Approximately 77.5%	95%
Additional government interest	Expected 20% equity loan	No separate government equity loan
Property choice	Expected to be participating new builds only	Existing and new-build homes, subject to lender criteria
Availability	Not yet open	Available now through participating lenders
Future cost	Equity-loan interest and repayment terms unknown	Mortgage interest, fees and repayments under the chosen product

The permanent Mortgage Guarantee Scheme supports eligible 91% to 95% loan-to-value mortgages, so buyers with 5% may already have options. The mortgage deposit calculator can compare standard deposits, but it does not model Your First Home.

What could be the advantages of Your First Home?

The expected 2.5% deposit could reduce the savings barrier. A 77.5% mortgage would also be smaller than a 95% mortgage on the same price, which may help some buyers with limited borrowing capacity.

The government says users could save hundreds of pounds per month compared with a 95% mortgage. That is not guaranteed: actual costs will depend on mortgage rates, fees, equity-loan terms and individual circumstances.

What costs and risks remain unknown?

Before buyers can judge whether the scheme offers good value, the government needs to confirm:

• the length of the interest-free period;
• the interest rate and any annual increases after that period;
• any management or administration fees;
• how full and partial repayments will be valued;
• whether the repayment amount will rise or fall with the property’s value;
• any restrictions affecting a sale, remortgage, letting or home improvements;
• valuation and legal costs;
• which lenders and developers will participate; and
• how local price caps compare with the price of new-build homes in each area.

Buyers should also consider whether a new-build premium could affect future value. We would compare the mortgage rate, equity-loan charges, repayment basis, legal costs and likely time in the property, not the deposit alone.

What can first-time buyers do while waiting?

1. Work out a realistic monthly housing budget.
2. Review credit reports and correct any factual errors.
3. Continue saving for the deposit, purchase costs and an emergency buffer.
4. Avoid committing to a property on the assumption that the scheme will apply.
5. Compare what might be possible now with a 5% deposit against the potential benefit of waiting.
6. Decide whether a new build is genuinely the preferred property type.
7. Recheck the official position after the Budget.

Our mortgage affordability calculator can provide a rough starting point based on household income, debts and regular outgoings. If the numbers are close, discussing first-time buyer mortgage options can help establish whether an existing route is realistic.

Should you wait for the Your First Home scheme?

Waiting may be reasonable for someone with only a 2.5% deposit who strongly prefers a participating new build. Others may already be able to buy with a 5% deposit or another route. Waiting can mean additional rent and exposure to changing prices or mortgage rates.

Consider current savings, saving rate, affordability, preferred property and area, likely price caps, readiness to buy, waiting costs and the final equity-loan terms.

One of the first things we would want to understand is whether the buyer is blocked by the deposit, by mortgage affordability, or by both. An equity loan may help those two problems differently.

How Monday Mortgages can help

Your First Home is not open, but Monday Mortgages can assess your deposit, income and existing first-time buyer mortgage options, then revisit the comparison when the scheme’s rules and lenders are confirmed.