Your First Home Scheme: what we know so far
A new government-backed scheme has been announced for first-time buyers in England, with a deposit as low as 2.5% and an equity loan of up to 20% towards an eligible new-build home. Here's what has been confirmed, what we're still waiting to find out, and what it could mean for your mortgage.
Your First Home has been announced by the Government, but the full scheme rules have not yet been published. Further details, including household income limits, local property price caps, costs and implementation timelines, are expected at the Budget in October. We'll update this page as those details are confirmed.
What is the Your First Home scheme?
Your First Home is a proposed government-backed equity loan scheme designed to help first-time buyers in England purchase a new-build home with a smaller upfront deposit.
Under the structure announced so far, an eligible first-time buyer could put down a deposit of 2.5% of the property's value and receive a government-backed equity loan of up to 20%.
That could leave around 77.5% of the purchase price to be covered by a mortgage. This is one of the particularly interesting parts of the scheme, because it means the mortgage itself could sit at a much lower loan-to-value than a traditional 95% mortgage.
There are some important details still to come, though. The scheme will be subject to a household income cap and local property price caps, and the property will need to be a new-build from a developer participating in the scheme.
The minimum deposit proposed under the announced scheme.
A government-backed equity loan of up to 20% is proposed.
If using the full 20% equity loan alongside a 2.5% deposit.
How could it work?
Based on the structure announced so far, the purchase could effectively be split into three parts.
You provide the deposit
An eligible buyer could potentially purchase with a deposit of just 2.5% of the property's value.
The equity loan provides up to 20%
The Government-backed equity loan could cover up to another 20% of the property's value, subject to the final scheme rules.
You arrange the mortgage
If you used a 2.5% deposit and the full 20% equity loan, the remaining 77.5% could potentially be funded with a mortgage.
What could that look like on a £300,000 home?
Here's a simple illustration comparing the announced Your First Home structure with purchasing the same property using a 5% deposit and a 95% mortgage.
The equity loan isn't a gifted deposit or a discount on the property. It is finance that will eventually need to be repaid. The Government has confirmed that there will be an initial interest-free period, but the full costs and repayment arrangements have not yet been published. Those details matter when comparing the scheme with other ways of buying.
Your First Home calculator
Enter a property price to see what the announced 2.5% deposit and 20% equity loan structure could look like in pounds and pence.
Enter a property price
We'll calculate the illustration automatically as you type.
This is an illustration of the percentages announced by the Government, not an eligibility, affordability or mortgage quotation tool. Local property price caps are due to be announced.
Why could the lower mortgage amount matter?
The smaller deposit is likely to grab the headlines, but the potential loan-to-value of the mortgage is worth understanding too.
If you bought a home using a 5% deposit and no other contribution, you'd usually need a mortgage for the remaining 95% of the property's value. That's known as a 95% loan-to-value, or LTV, mortgage.
If the Your First Home scheme worked as announced and you used a 2.5% deposit alongside the full 20% equity loan, the mortgage requirement could instead be around 77.5% of the purchase price.
That doesn't automatically make it the cheaper option.
Different LTV bands can open up different mortgage products and rates, so reducing the amount being borrowed through the mortgage could be significant. However, the equity loan sits alongside that mortgage and will eventually need to be repaid.
The useful comparison therefore isn't simply “2.5% deposit versus 5% deposit”. Once the full scheme details are available, you'll want to look at the mortgage, equity loan, future repayment costs and your longer-term plans together.
What's been confirmed — and what are we waiting for?
The announcement gives us the broad structure, but some of the details that will determine who can actually use the scheme are still to come.
What we know so far
- The scheme is called Your First Home.
- It is intended to support first-time buyers in England.
- Deposits as low as 2.5% are proposed.
- Government-backed equity loans of up to 20% are proposed.
- The equity loan will have an initial interest-free period.
- It will apply to eligible new-build properties.
- The developer will need to be participating in the scheme.
- Household income and local property price caps will apply.
Details still to be confirmed
- The household income limits.
- The local property price caps.
- The full equity loan costs and repayment terms.
- How long the initial interest-free period will last.
- The full eligibility criteria.
- Which developers and properties will participate.
- The detailed application process.
- The full implementation and launch timetable (with pre-registration expected to begin by the end of 2026).
Who could the scheme help?
The scheme is being designed for first-time buyers who may be able to afford the ongoing costs of home ownership but find saving a large enough deposit difficult.
A lower deposit requirement could reduce the amount that needs to be saved before buying. At the same time, the equity loan could reduce the size of the mortgage needed compared with purchasing the same property using a traditional 95% mortgage.
That doesn't mean it will be suitable — or available — for every first-time buyer. Mortgage affordability will still matter, and the household income cap, local property price cap, participating property requirements and full equity loan terms could all affect whether the scheme is an option for you.
If you're still at the planning stage, our complete first-time buyer guide takes you through deposits, affordability, credit checks, mortgage applications, surveys, solicitors and the rest of the buying process.
Your First Home scheme FAQs
These answers are based on the information announced so far and will be updated when the full scheme rules are published.
What is the Your First Home scheme?
Your First Home is a new government-backed equity loan scheme announced for first-time buyers in England. The proposed structure could allow eligible buyers to purchase an eligible new-build home with a 2.5% deposit and a government-backed equity loan of up to 20%.
How much deposit will I need?
The Government has announced that the scheme is expected to support deposits of 2.5%. On a £300,000 property, 2.5% would be £7,500. Eligibility and local property price limits will apply.
Is the 20% from the Government free money?
No. It is an equity loan rather than a gifted deposit. It will eventually need to be repaid. The Government has confirmed an initial interest-free period, but the full costs and repayment terms have not yet been announced.
Will I still need a mortgage?
Yes. If you used a 2.5% deposit and the full 20% equity loan, approximately 77.5% of the purchase price would remain to be funded. For most buyers this is likely to mean arranging a mortgage, subject to lender criteria and affordability.
Can I use the scheme to buy any property?
No. The Government announcement says the scheme is intended for first-time buyers purchasing a new-build property from a developer signed up to the scheme. Local property price caps will also apply.
What is the income limit for Your First Home?
A household income cap will apply, but the limit has not yet been published. The Government has said further details will be set out at the Budget.
When will the Your First Home scheme start?
A full implementation timetable has not yet been confirmed. Further details are expected at the Budget in October 2026.
Is Your First Home the same as a 95% mortgage?
No. With a traditional 95% mortgage, you provide a 5% deposit and borrow the remaining 95% through the mortgage. Under the Your First Home structure announced so far, an eligible buyer could potentially provide 2.5%, use an equity loan of up to 20%, and require a mortgage for the remaining amount. The equity loan would still need to be considered as part of the overall cost of buying.
Can I apply for Your First Home now?
Not yet. The scheme has been announced but the full rules and implementation timetable are still to be confirmed. If you're hoping to buy your first home, you don't necessarily need to wait before looking at your current options and working out what may already be affordable.
Thinking about buying your first home?
You don't need to wait for the scheme to launch before working out where you stand. We can look at your deposit, income, budget and current mortgage options and help you understand what's realistic now — as well as where Your First Home might fit once the full details are available.
This page is based on information announced by the UK Government as at 28 September 2026. The full Your First Home scheme rules have not yet been published and the scheme is subject to further detail and confirmation. Calculator figures are illustrations only and do not constitute mortgage, financial or eligibility advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IMPORTANT: With investments, your capital is at risk. Pensions and investments can go down in value as well as up, so you could get back less than you invest.
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