Guidance

Your First Home

Published 28 October 2026

Applies to England

Overview

Your First Home is a new government scheme to help first-time buyers purchase a new-build home with a smaller deposit and mortgage.

Eligible buyers will be able to purchase a home using:

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

The scheme is expected to open for applications in February 2027. More information about eligible homes, participating developers and lenders, and how to apply will be published before applications open.

Example: buying a £300,000 home

A home purchase could be funded as follows.

Source of funding	Amount
Your deposit (2.5%)	£7,500
Government equity loan (20%)	£60,000
Repayment mortgage	£232,500
Total purchase price	£300,000

Without Your First Home, a buyer purchasing the same home with a standard 95% mortgage would typically need a £15,000 deposit and a £285,000 mortgage.

You will own your home from the day you complete your purchase. The government will not be a joint owner or your landlord.

As with any mortgage, participating lenders will carry out affordability and credit checks before making a lending decision.

£4.7 billion of funding is available for the scheme over 5 years, with £700 million allocated in 2027 to 2028 and £1 billion in each of the subsequent years. The government will work with developers to manage the allocation of this funding, and overall demand for the scheme will be kept under review.

Who the scheme is for

Your First Home is designed for first-time buyers purchasing a new-build home in England who would struggle to buy without assistance.

To use the scheme, buyers will normally need to:

• be a first-time buyer
• buy a new-build home in England, within the relevant local price cap
• use the property as their main home
• have a total annual household income of £110,000 or less outside London, or £140,000 or less within London
• be able to obtain a mortgage from a participating lender

Full eligibility rules will be published before applications open.

Homes you can buy

Your First Home will support the purchase of eligible new-build homes from developers participating in the scheme.

Property price caps will apply in each area to ensure the scheme supports access to modest homes. There will be caps for inner and outer London.

This helps ensure support is focused on the types of new-build homes most first-time buyers purchase, while recognising that housing markets vary across England.

A full list of price caps by local authority area will be published shortly.

Example national local authority price caps:

Location	Property price cap
Reading	£375,000
North Devon	£320,000
Manchester	£355,000
Middlesbrough	£220,000

London price caps:

Location	Property price caps
Inner London*	£650,000
Outer London*	£500,000

*as defined in the London Plan 2021.

Information about participating developers will also be made available ahead of launch.

What it could cost each month

Your actual monthly costs will depend on the home you buy, the mortgage rate you are offered and your personal circumstances.

The equity loan will be interest-free for the first 5 years.

The following interest rates will then apply.

Period	Interest rate
Years 1 to 5	0%
Year 6	1.5%
From year 7	3%

Interest payments are separate from your mortgage and do not reduce the amount of equity loan you owe.

Further information about how interest payments will be collected will be published before applications open.

Example monthly costs

The example below assumes:

• a £300,000 home
• a 30-year repayment mortgage
• a mortgage interest rate of 5%
• a £60,000 equity loan
• no repayment of the equity loan during the period shown
• Your First Home assumes a 2.5% deposit; Standard 95% mortgage assumes a 5% deposit

Period	Standard 95% mortgage	Your First Home mortgage	Equity loan interest	Total monthly cost under Your First Home
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

Figures are rounded to the nearest pound. This is an illustration only. It is not a mortgage quote and does not include other costs of buying and owning a home, such as:

• mortgage fees
• insurance
• council tax
• service charges
• estate charges
• maintenance costs

How the equity loan works

The equity loan is linked to the value of your home.

If the loan was worth 20% of the purchase price when you bought your home, you will normally repay 20% of the home’s value when you repay the loan, based on an independent valuation.

This means the amount you repay can go up or down as the value of your home changes.

If your home increases in value

You buy a home for £300,000 and receive a £60,000 equity loan.

If the home is later valued at £320,000:

• the property has increased in value by £20,000
• 20% of the new value is £64,000
• you repay £64,000

The amount you repay has increased by £4,000.

If your home decreases in value

You buy a home for £300,000 and receive a £60,000 equity loan.

If the home is later valued at £280,000:

• the property has decreased in value by £20,000
• 20% of the new value is £56,000
• you repay £56,000

The amount you repay has decreased by £4,000.

This means the government shares both increases and decreases in the value of your home.

Repaying the equity loan

The equity loan will normally be repaid when you sell your home.

You will also be able to repay some or all of the loan before selling.

An independent valuation may be required to establish the current market value of your home and the amount to be repaid.

Full repayment guidance will be published before applications open, including:

• minimum repayment amounts
• valuation requirements
• any fees that may apply
• how repayment works when selling or remortgaging

Before you apply

Buying a home is one of the biggest financial decisions many people make.

Before applying, you should consider:

• whether you can afford your mortgage payments
• whether you could afford higher mortgage rates in future
• the interest charges that apply to the equity loan
• legal and mortgage fees
• council tax, insurance and maintenance costs
• service charges or estate charges
• the costs of selling or remortgaging your home

You should strongly consider obtaining independent financial and legal advice before committing to a purchase.

How to apply

Applications are not open yet. The scheme will open for customer pre-registration before the end of the year – this will not commit you to purchasing through the scheme, but will provide further information on your eligibility for the scheme and price caps applicable in your area.

Before the scheme opens, the government will publish full guidance, terms and conditions on the operation of the scheme.

Developer participation

Your First Home is intended to support both home ownership and the delivery of new homes across England.

Developers of all sizes will be able to participate, subject to meeting the scheme requirements. Developers will need to enter into a participation agreement.

Developer participation fees, based on final sale price, will apply to properties sold using the scheme and will go towards supporting the running costs of the scheme. To help ensure the scheme remains accessible to small and medium-sized developers, fees will increase gradually according to the number of homes sold through the scheme each year.

Developer fee rates

Homes sold each year through the scheme	Fee rate
First 100 homes	1%
Homes 101 to 250	3%
Homes above 250	4%

The rates apply progressively.

For example, a developer selling 500 homes through the scheme would pay:

• 1% on the first 100 homes
• 3% on the next 150 homes
• 4% on the remaining homes

This equates to an average contribution of 3.1%

Timeline

By the end of December 2026:

• customer pre-registration and guidance
• first developer registrations

February 2027:

• first customer applications

April 2027:

• first property sales under the scheme