Your First Home Scheme: What you need to know
Saving enough to buy your first home can be tough. When you’re paying rent, bills and everything else life throws at you, finding the cash for a house deposit can feel like an impossible task.
That’s where the new Your First Home scheme could help.
The Government has announced plans for a new scheme that could let you buy your first home with a deposit of just 2.5%, if you’re eligible. The Government would provide a 20% equity loan, helping to reduce the amount you need to borrow through a mortgage.
There are still some important details yet to be announced by the Government so don’t worry if you’re not sure whether the scheme could work for you yet.
Here’s what we know so far and what you can do while you wait.
Quick summary
- You’ll need to be a first time buyer
- You could buy with a deposit of 2.5%
- You could get a 20% Government-backed equity loan
- You’d need a mortgage for the remaining 77.5%
- You’ll need to be buying in England
- You'll need to buy a new build from a developer signed up to the scheme
What is the Your First Home scheme?
Your First Home is a new Government equity loan scheme that could make it easier for you to buy your first home, particularly if saving a big enough deposit is holding you back.
Instead of having to fund your purchase using just your deposit and a mortgage, you could use a Government equity loan to cover part ofthe cost of your new home.
If you’re eligible, your purchase could be made up of:
- 2.5% deposit from you
- 20% Government equity loan
- 77.5% mortgage
Your First Home is expected to be available in England and will only apply when you’re buying an eligible new build property from a developer taking part in the scheme.
How much deposit will you need?
You could buy your home with a deposit of just 2.5% of the property price under the proposed scheme.
So, if you were buying a home for £300,000, it could look like this:
- Property price: £300,000
- Your 2.5% deposit: £7,500
- Government 20% equity loan: £60,000
- Your 77.5% mortgage: £232,500
That could make your savings target feel much more achievable if the deposit is the main thing holding you back.
Remember though, your deposit is only one part of buying your first home. You’ll still need to be able to afford the mortgage, as well as the other costs that come with buying and owning a property.
Who will be able to use the Your First Home scheme?
We don’t have all the eligibility rules yet.
What we do know is you’ll need to be a first time buyer purchasing an eligible new build property in England from a developer that’s signed up to the scheme.
There’ll also be a household income cap and local property price caps. The Government hasn’t announced exactly what those limits will be yet.
So, if you’re wondering whether you’ll qualify, don’t rule yourself in or out just yet.
There’s more information to come before you’ll know for certain whether the scheme is an option for you.
Can you use Your First Home to buy any property?
No. Your First Home is expected to be available when you buy a new build property from a developer signed up to the scheme.
So, if you’re looking at an older or previously owned home, you won’t be able to use the scheme based on the plans announced so far.
Developers will also be expected to make a contribution towards the costs of Your First Home when they sign up.
What is a Government equity loan?
A Government equity loan is money the Government lends you to help you buy a home.
The amount you pay back is linked to how much your home is worth when you repay the loan. This means you could pay back more or less than you originally borrowed, depending on whether your home's value has gone up or down.
For example, if the Government lent you 20% of your home's value, you'll normally need to repay 20% of its value when you pay the loan back.
Here’s an example to help you make sense of it.
- Property value: £200,000
- Government equity loan: 20% = £40,000
- If the property later became worth £250,000, repaying the full 20% equity share would mean repaying £50,000
Will your equity loan be interest-free?
Initially, yes. The Government has confirmed you’ll get an initial interest-free period on the equity loan.
What we don’t know yet is how long that period will last or what costs could apply afterwards.
This matters because you’ll need to understand what the equity loan could cost you over the longer term, not just how it could help you buy your home.
Once those details are available, we’ll update this page so you can understand what they could mean for you.
How will you repay the equity loan?
We’re still waiting on the details for this.
The Government has confirmed the scheme will use a 20% equity loan, but the initial announcement doesn’t explain how or when you’ll need to repay it.
An equity loan isn’t simply a discount on the price of your home, so you'll need to understand how repayment works before deciding whether to use the scheme.
How does Your First Home compare with Help to Buy?
The new scheme might sound familiar if you remember Help to Buy.
Both use a Government equity loan to help you towards the cost of buying a home, but Your First Home is a new scheme with its own rules.
One big difference we already know about is the proposed deposit. You could potentially use Your First Home with a deposit of 2.5%.
With the previous Help to Buy Equity Loan scheme, you needed at least a 5% deposit. The Government equity loan could cover up to 20% of your home's market value, or up to 40% if you were buying in London. You weren't charged interest on that equity loan for the first five years.
We don't yet know whether some of the other rules will be similar, so don’t assume Your First Home will work in exactly the same way.
What details are we still waiting for?
There are still a few important pieces of the puzzle missing.
What will the income limit be?
We know there’ll be a household income cap, but we don’t yet know what the limit will be.
That means you won't know for certain whether your household income meets the requirements until the limits are announced.
How much can your home cost?
Local property price caps will apply, which means there’ll be a limit on how much the property you’re buying can cost.
We’re still waiting to find out what the limits will be.
How long will your equity loan be interest-free?
You'll get an initial interest-free period, but its length hasn’t been announced yet.
We also don't yet have details about what you could pay when that interest-free period comes to an end.
How will you repay your equity loan?
We’re waiting for more information about how repayment will work.
Once the details are available, you'll be able to get a much clearer idea of what using the scheme could mean for you over the longer term.
Which mortgage lenders will you be able to choose from?
We don't yet have a confirmed list of mortgage lenders that’ll take part in Your First Home.
That means we also don’t yet know what mortgage deals could be available to you through the scheme.
When can you apply?
You can’t apply for Your First Home yet.
The Government has said further details, including costs and implementation timelines, will be announced at the Budget.
Could Your First Home help you buy sooner?
Yes, especially if saving for the deposit is what's holding you back.
If you're buying a £250,000 home, for example, a 2.5% deposit would be £6,250. Currently the average house deposit in England and Wales is a staggering £63,855.
While this might be easier to save, the deposit isn’t the only thing to consider.
You'll still need to find a mortgage you can afford. You'll also have the equity loan to think about, as well as the other costs involved in buying and owning your home.
Should you wait for the Your First Home scheme?
That will depend on your specific circumstances.
While Your First Home could give you a helping hand onto the property ladder, if you have a deposit saved already or have got your eye on a home that isn’t included in the scheme then talking to an L&C mortgage adviser can help you make the right decision.
You might also find there are mortgage options or other schemes already available that could help you buy.
If you’re hoping to buy soon, understanding the options available to you now can help you decide whether it makes sense to keep moving or wait to find out more about Your First Home.
What can you do while you wait?
Even though Your First Home isn’t available yet, you can still start getting yourself ready to buy.
You could:
- Work out how much you’ve already saved towards your deposit
- Think about how much you could comfortably afford each month
- Look at new build property prices in the areas where you’d like to live
- Check your credit report and make sure the information is correct
- Get an idea of how much you could potentially borrow
- Explore the other first time buyer schemes and mortgage options available to you now
Most importantly, don’t worry if you haven’t got everything figured out yet. Buying your first home is a big step. Taking it one stage at a time can make everything feel a lot more manageable.
We’ll keep you updated
There’s still more to learn about Your First Home, from who’ll qualify to how you’ll eventually repay the equity loan.
Bookmark this guide, and we’ll update whenever more information is announced. This means you’ll get the most up-to-date advice, explained in plain English.
Important information
Your First Home hasn’t launched yet and the full scheme rules haven’t been published. This guide is based on information the Government announced on 26 September 2026.
All information found on this page is correct as of 08/10/2026
You can also read the Government's Your First Home announcement for the currently confirmed information.
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