Your First Home scheme: how it works for first-time buyers
Last updated: November 3, 2026
The government has officially announced Your First Home, a new scheme designed to help eligible first-time buyers buy a new-build home in England with a smaller deposit and mortgage.
The scheme is expected to open for applications in February 2027, with the first properties expected to be sold under the scheme in April. Some details are still to come, including the full eligibility rules.
In summary:
- Your First Home is a new government scheme designed to help eligible first-time buyers buy a new-build home in England
- Eligible buyers will be able to purchase with a deposit of at least 2.5%, alongside a 20% government equity loan and a repayment mortgage from a participating lender
- The equity loan will be interest-free for the first 5 years. Interest will be 1.5% in year 6 and 3% from year 7
- Household income limits are £110,000 or less outside London and £140,000 or less within London
- Local property price caps apply. The caps are based on the local authority’s median house price
- The scheme is expected to open for applications in February 2027, with more details about eligible homes, participating developers and lenders, and applications to come before then
Your First Home is designed to reduce the amount some first-time buyers need to save before buying a home. Instead of funding your purchase using just a deposit and mortgage, the scheme adds a government equity loan.
This means your purchase could be made up of three parts: your cash deposit, the government equity loan and your mortgage.
Here’s what you need to know about how the scheme works, how much deposit you could need and what it might mean for your budget.
See what homes you could afford with the Your First Home scheme calculator
How does the Your First Home scheme work?
Eligible buyers will be able to buy a home using:
- a deposit of at least 2.5% of the purchase price
- a 20% government equity loan
- a repayment mortgage from a participating lender to cover the remaining amount
For example, if you were buying a £300,000 home with a 2.5% deposit, your purchase could look like this:
- Your deposit: £7,500
- Government equity loan: £60,000
- Mortgage: £232,500
Having enough for the deposit doesn’t necessarily mean you’ll be able to borrow the mortgage amount you need. Participating lenders will carry out affordability and credit checks before deciding whether to offer you a mortgage.
The full eligibility rules will be published before applications open.
How much deposit do I need for Your First Home?
The minimum deposit is 2.5% of the purchase price, so the amount you’ll need to save will depend on the price of the home you’re buying.
Here are some examples of what different deposit amounts could mean:
| Deposit (2.5%) | Illustrative property price | Equity loan (20%) | Mortgage (77.5%) | Illustrative income at 4.5x* |
|---|---|---|---|---|
| £2,500 | £100,000 | £20,000 | £77,500 | £17,222 |
| £3,750 | £150,000 | £30,000 | £116,250 | £25,833 |
| £5,000 | £200,000 | £40,000 | £155,000 | £34,444 |
| £6,250 | £250,000 | £50,000 | £193,750 | £43,056 |
| £7,500 | £300,000 | £60,000 | £232,500 | £51,667 |
| £8,750 | £350,000 | £70,000 | £271,250 | £60,278 |
| £10,000 | £400,000 | £80,000 | £310,000 | £68,889 |
| £11,250 | £450,000 | £90,000 | £348,750 | £77,500 |
| £12,500 | £500,000 | £100,000 | £387,500 | £86,111 |
*The income column simply divides the illustrative 77.5% mortgage by 4.5. It isn’t an indication of what a lender could offer you. The amount you can borrow will depend on the lender’s affordability assessment and eligibility criteria.
These figures don’t show the maximum price you could pay under the Your First Home scheme. Local property price caps apply, ranging from £215,000, up to £650,000 in Inner London.
For example, a £5,000 deposit represents 2.5% of a £200,000 home. With a 20% equity loan, that would mean a £40,000 equity loan and a £155,000 mortgage.
Similarly, a £7,500 deposit represents 2.5% of a £300,000 home, with a £60,000 equity loan and £232,500 mortgage. The government’s guidance uses this £300,000 example when explaining how the scheme could fund a purchase.
See what homes you could afford with the Your First Home scheme calculator
How much could I afford with Your First Home?
Having enough money for a 2.5% deposit is only part of working out what you could afford.
The amount you can spend on a home will also depend on how much you can borrow through a mortgage, as well as the scheme’s household income limits and the property price cap for the area where you’re buying.
For example, your deposit might equal 2.5% of a particular property price, but you’d still need to qualify for the mortgage required to complete the purchase.
If you know how much you have saved, you can start by looking at the property price your deposit could theoretically support. If you have an idea of what you might be able to borrow, you can instead look at how your mortgage, deposit and potential equity loan could come together.
Who is eligible for the Your First Home scheme?
Your First Home is designed for first-time buyers purchasing a new-build home in England who would struggle to buy without support.
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 get a mortgage from a participating lender
These aren’t yet the complete eligibility rules. The government says full eligibility criteria will be published before applications open.
What are the Your First Home property price caps?
Property price caps will apply to homes bought through Your First Home, and the caps vary by area. Price caps are based on the local authority’s median average house price. Check your eligibility for the scheme using Rightmove’s Your First Home calculator.
No results found. Some areas may be listed under a wider local authority. Try searching for your county, city or local authority instead.
| Region | Number of local authorities | Property price cap |
|---|---|---|
| 35 | £230,000 to £400,000 | |
| Amber Valley | £290,000 | |
| Ashfield | £275,000 | |
| Bassetlaw | £245,000 | |
| Blaby | £335,000 | |
| Bolsover | £240,000 | |
| Boston | £235,000 | |
| Broxtowe | £285,000 | |
| Charnwood | £325,000 | |
| Chesterfield | £255,000 | |
| Derby | £290,000 | |
| Derbyshire Dales | £295,000 | |
| East Lindsey | £230,000 | |
| Erewash | £245,000 | |
| Gedling | £295,000 | |
| Harborough | £325,000 | |
| High Peak | £285,000 | |
| Hinckley and Bosworth | £305,000 | |
| Leicester | £340,000 | |
| Lincoln | £270,000 | |
| Mansfield | £270,000 | |
| Melton | £300,000 | |
| Newark and Sherwood | £275,000 | |
| North East Derbyshire | £285,000 | |
| North Kesteven | £270,000 | |
| North Northamptonshire | £325,000 | |
| North West Leicestershire | £320,000 | |
| Nottingham | £300,000 | |
| Oadby and Wigston | £400,000 | |
| Rushcliffe | £355,000 | |
| Rutland | £310,000 | |
| South Derbyshire | £295,000 | |
| South Holland | £255,000 | |
| South Kesteven | £290,000 | |
| West Lindsey | £250,000 | |
| West Northamptonshire | £355,000 | |
| 45 | £260,000 to £530,000 | |
| Babergh | £355,000 | |
| Basildon | £460,000 | |
| Bedford | £410,000 | |
| Braintree | £435,000 | |
| Breckland | £310,000 | |
| Brentwood | £385,000 | |
| Broadland | £345,000 | |
| Broxbourne | £530,000 | |
| Cambridge | £505,000 | |
| Castle Point | £365,000 | |
| Central Bedfordshire | £440,000 | |
| Chelmsford | £410,000 | |
| Colchester | £385,000 | |
| Dacorum | £380,000 | |
| East Cambridgeshire | £370,000 | |
| East Hertfordshire | £470,000 | |
| East Suffolk | £315,000 | |
| Epping Forest | £470,000 | |
| Fenland | £280,000 | |
| Great Yarmouth | £280,000 | |
| Harlow | £370,000 | |
| Hertsmere | £460,000 | |
| Huntingdonshire | £410,000 | |
| Ipswich | £315,000 | |
| King’s Lynn and West Norfolk | £320,000 | |
| Luton | £365,000 | |
| Maldon | £390,000 | |
| Mid Suffolk | £350,000 | |
| North Hertfordshire | £465,000 | |
| North Norfolk | £285,000 | |
| Norwich | £260,000 | |
| Peterborough | £315,000 | |
| Rochford | £435,000 | |
| South Cambridgeshire | £455,000 | |
| South Norfolk | £350,000 | |
| Southend-on-Sea | £320,000 | |
| St Albans | £515,000 | |
| Stevenage | £450,000 | |
| Tendring | £365,000 | |
| Three Rivers | £440,000 | |
| Thurrock | £350,000 | |
| Uttlesford | £475,000 | |
| Watford | £420,000 | |
| Welwyn Hatfield | £385,000 | |
| West Suffolk | £380,000 | |
| 33 | £500,000 to £650,000 | |
| Barking and Dagenham | £500,000 | |
| Barnet | £500,000 | |
| Bexley | £500,000 | |
| Brent | £500,000 | |
| Bromley | £500,000 | |
| Camden | £650,000 | |
| City of London | £650,000 | |
| Croydon | £500,000 | |
| Ealing | £500,000 | |
| Enfield | £500,000 | |
| Greenwich | £650,000 | |
| Hackney | £650,000 | |
| Hammersmith and Fulham | £650,000 | |
| Haringey | £500,000 | |
| Harrow | £500,000 | |
| Havering | £500,000 | |
| Hillingdon | £500,000 | |
| Hounslow | £500,000 | |
| Islington | £650,000 | |
| Kensington and Chelsea | £650,000 | |
| Kingston upon Thames | £500,000 | |
| Lambeth | £650,000 | |
| Lewisham | £650,000 | |
| Merton | £500,000 | |
| Newham | £650,000 | |
| Redbridge | £500,000 | |
| Richmond upon Thames | £500,000 | |
| Southwark | £650,000 | |
| Sutton | £500,000 | |
| Tower Hamlets | £650,000 | |
| Waltham Forest | £500,000 | |
| Wandsworth | £650,000 | |
| Westminster | £650,000 | |
| 12 | £220,000 to £270,000 | |
| County Durham | £220,000 | |
| Darlington | £240,000 | |
| Gateshead | £240,000 | |
| Hartlepool | £220,000 | |
| Middlesbrough | £220,000 | |
| Newcastle upon Tyne | £265,000 | |
| North Tyneside | £270,000 | |
| Northumberland | £225,000 | |
| Redcar and Cleveland | £220,000 | |
| South Tyneside | £230,000 | |
| Stockton-on-Tees | £235,000 | |
| Sunderland | £235,000 | |
| 35 | £220,000 to £360,000 | |
| Blackburn with Darwen | £275,000 | |
| Blackpool | £235,000 | |
| Bolton | £300,000 | |
| Burnley | £230,000 | |
| Bury | £340,000 | |
| Cheshire East | £310,000 | |
| Cheshire West and Chester | £295,000 | |
| Chorley | £300,000 | |
| Cumberland | £220,000 | |
| Fylde | £275,000 | |
| Halton | £305,000 | |
| Hyndburn | £240,000 | |
| Knowsley | £285,000 | |
| Lancaster | £285,000 | |
| Liverpool | £235,000 | |
| Manchester | £355,000 | |
| Oldham | £300,000 | |
| Pendle | £250,000 | |
| Preston | £280,000 | |
| Ribble Valley | £280,000 | |
| Rochdale | £275,000 | |
| Rossendale | £270,000 | |
| Salford | £305,000 | |
| Sefton | £290,000 | |
| South Ribble | £265,000 | |
| St Helens | £270,000 | |
| Stockport | £305,000 | |
| Tameside | £310,000 | |
| Trafford | £285,000 | |
| Warrington | £360,000 | |
| West Lancashire | £275,000 | |
| Westmorland and Furness | £275,000 | |
| Wigan | £270,000 | |
| Wirral | £255,000 | |
| Wyre | £255,000 | |
| 64 | £225,000 to £505,000 | |
| Adur | £420,000 | |
| Arun | £405,000 | |
| Ashford | £435,000 | |
| Basingstoke and Deane | £425,000 | |
| Bracknell Forest | £500,000 | |
| Brighton and Hove | £415,000 | |
| Buckinghamshire | £430,000 | |
| Canterbury | £405,000 | |
| Cherwell | £420,000 | |
| Chichester | £405,000 | |
| Crawley | £330,000 | |
| Dartford | £365,000 | |
| Dover | £350,000 | |
| East Hampshire | £425,000 | |
| Eastbourne | £310,000 | |
| Eastleigh | £425,000 | |
| Elmbridge | £490,000 | |
| Epsom and Ewell | £480,000 | |
| Fareham | £415,000 | |
| Folkestone and Hythe | £340,000 | |
| Gosport | £225,000 | |
| Gravesham | £420,000 | |
| Guildford | £505,000 | |
| Hart | £445,000 | |
| Hastings | £375,000 | |
| Havant | £380,000 | |
| Horsham | £450,000 | |
| Isle of Wight | £260,000 | |
| Lewes | £405,000 | |
| Maidstone | £415,000 | |
| Medway | £420,000 | |
| Mid Sussex | £460,000 | |
| Milton Keynes | £440,000 | |
| Mole Valley | £330,000 | |
| New Forest | £330,000 | |
| Oxford | £415,000 | |
| Portsmouth | £340,000 | |
| Reading | £375,000 | |
| Reigate and Banstead | £445,000 | |
| Rother | £390,000 | |
| Runnymede | £430,000 | |
| Rushmoor | £365,000 | |
| Sevenoaks | £465,000 | |
| Slough | £395,000 | |
| South Oxfordshire | £450,000 | |
| Southampton | £245,000 | |
| Spelthorne | £375,000 | |
| Surrey Heath | £385,000 | |
| Swale | £410,000 | |
| Tandridge | £470,000 | |
| Test Valley | £365,000 | |
| Thanet | £350,000 | |
| Tonbridge and Malling | £435,000 | |
| Tunbridge Wells | £445,000 | |
| Vale of White Horse | £415,000 | |
| Waverley | £460,000 | |
| Wealden | £400,000 | |
| West Berkshire | £430,000 | |
| West Oxfordshire | £390,000 | |
| Winchester | £420,000 | |
| Windsor and Maidenhead | £415,000 | |
| Woking | £345,000 | |
| Wokingham | £485,000 | |
| Worthing | £300,000 | |
| 27 | £265,000 to £400,000 | |
| Bath and North East Somerset | £400,000 | |
| Bournemouth, Christchurch and Poole | £315,000 | |
| Bristol, City of | £325,000 | |
| Cheltenham | £325,000 | |
| Cornwall | £310,000 | |
| Cotswold | £395,000 | |
| Dorset | £355,000 | |
| East Devon | £325,000 | |
| Exeter | £370,000 | |
| Forest of Dean | £300,000 | |
| Gloucester | £325,000 | |
| Isles of Scilly | £310,000 | |
| Mid Devon | £320,000 | |
| North Devon | £320,000 | |
| North Somerset | £350,000 | |
| Plymouth | £265,000 | |
| Somerset | £315,000 | |
| South Gloucestershire | £385,000 | |
| South Hams | £345,000 | |
| Stroud | £355,000 | |
| Swindon | £375,000 | |
| Teignbridge | £340,000 | |
| Tewkesbury | £350,000 | |
| Torbay | £325,000 | |
| Torridge | £290,000 | |
| West Devon | £315,000 | |
| Wiltshire | £350,000 | |
| 30 | £245,000 to £390,000 | |
| Birmingham | £315,000 | |
| Bromsgrove | £365,000 | |
| Cannock Chase | £290,000 | |
| Coventry | £305,000 | |
| Dudley | £295,000 | |
| East Staffordshire | £260,000 | |
| Herefordshire, County of | £310,000 | |
| Lichfield | £310,000 | |
| Malvern Hills | £330,000 | |
| Newcastle-under-Lyme | £265,000 | |
| North Warwickshire | £315,000 | |
| Nuneaton and Bedworth | £315,000 | |
| Redditch | £330,000 | |
| Rugby | £370,000 | |
| Sandwell | £280,000 | |
| Shropshire | £305,000 | |
| Solihull | £310,000 | |
| South Staffordshire | £300,000 | |
| Stafford | £295,000 | |
| Staffordshire Moorlands | £250,000 | |
| Stoke-on-Trent | £245,000 | |
| Stratford-on-Avon | £340,000 | |
| Tamworth | £300,000 | |
| Telford and Wrekin | £285,000 | |
| Walsall | £290,000 | |
| Warwick | £390,000 | |
| Wolverhampton | £290,000 | |
| Worcester | £305,000 | |
| Wychavon | £295,000 | |
| Wyre Forest | £295,000 | |
| 15 | £215,000 to £370,000 | |
| Barnsley | £245,000 | |
| Bradford | £265,000 | |
| Calderdale | £275,000 | |
| Doncaster | £240,000 | |
| East Riding of Yorkshire | £265,000 | |
| Kingston upon Hull, City of | £230,000 | |
| Kirklees | £285,000 | |
| Leeds | £305,000 | |
| North East Lincolnshire | £230,000 | |
| North Lincolnshire | £215,000 | |
| North Yorkshire | £290,000 | |
| Rotherham | £285,000 | |
| Sheffield | £260,000 | |
| Wakefield | £260,000 | |
| York | £370,000 |
Separate London price caps have been announced:
- Inner London: £650,000
- Outer London: £500,000
What falls under inner and outer London are defined under The London Plan 2021.
Which homes can I buy with Your First Home?
Your First Home will support eligible new-build homes from developers participating in the scheme. The home will also need to fall within the relevant local property price cap.
The government says information about participating developers will be made available ahead of launch.
How does the Your First Home equity loan work?
The government equity loan will be worth 20% of the property’s purchase price and will be interest-free for the first 5 years.
For example, the equity loan on a £250,000 home would be £50,000. On a £300,000 home, it would be £60,000.
Interest rates will then be:
- Years 1 to 5: 0%
- Year 6: 1.5%
- From year 7: 3%
Interest payments will be separate from your mortgage payments and won’t reduce the amount you owe on the equity loan. Further information about how these interest payments will be collected will be published before applications open.
The government have shared the below example figures illustrating what monthly repayments could look like under the scheme, and how these might change in years 6 and 7.
| Period | Your First Home mortgage | Equity loan interest | Total monthly cost under Your First Home |
| Years 1 to 5 | £1,248 | £0 | £1,248 |
| Year 6 | £1,248 | £75 | £1,323 |
| From year 7 | £1,248 | £150 | £1,398 |
What happens if my home’s value changes?
The equity loan is linked to the value of your home.
If it represented 20% of your home’s purchase price when you bought it, you’ll normally repay 20% of your home’s value when you repay the loan, based on an independent valuation.
So, the amount you repay can go up or down as your home’s value changes.
For example, if you bought a £300,000 home using a £60,000 equity loan and the home was later valued at £320,000, 20% of its new value would be £64,000.
If the home was instead valued at £280,000, 20% would be £56,000.
When do I repay the Your First Home equity loan?
The equity loan will normally be repaid when you sell your home. You’ll also be able to repay some or all of it before you sell. An independent valuation may be needed to establish the home’s current market value and how much you need to repay.
There are still some details to come. The government says 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
What’s the difference between Your First Home and a standard mortgage?
When you buy a home without an equity loan scheme, you would usually fund the purchase through your own deposit and mortgage.
With Your First Home, a government equity loan provides another part of the funding. An eligible purchase could therefore combine a deposit of at least 2.5%, a 20% equity loan and a repayment mortgage for the remaining amount.
That means a smaller mortgage is required than if you were buying the same home with the same deposit but without the equity loan.
However, the equity loan comes with its own costs and repayment terms, so it’s important to consider these alongside your mortgage.
What other costs do I need to budget for when buying with Your First Home?
Your deposit isn’t the only cost to think about when you’re buying your first home.
Depending on your circumstances and the property, you might also need to budget for costs such as:
- mortgage fees
- survey costs
- conveyancing costs
- stamp duty, if applicable
- moving costs
- costs associated with buying and owning a new-build home.
You’ll also need to think about ongoing costs. The government’s guidance highlights mortgage payments, council tax, insurance, maintenance costs, service or estate charges and the future interest costs of the equity loan.
Your First Home scheme FAQs
-
When does Your First Home start?
The scheme is expected to open for applications in February 2027, with the first homes bought under the scheme from April 2027. More information about eligible homes, participating developers and lenders, and how to apply will be published before applications open.
-
Can I use Your First Home if I'm buying with someone else?
The government hasn’t yet published the full eligibility rules. These are due before applications open, so it’s worth checking the final criteria if you’re planning to buy with someone else.
-
Is Your First Home only for new-build homes?
The scheme is designed to support purchases of eligible new-build homes in England from participating developers.
More information about eligible homes and participating developers is due before applications open.
-
What is the maximum property price for Your First Home?
The maximum eligible property price will depend on where you’re buying.
The government has announced caps of £650,000 for inner London and £500,000 for outer London. There are 296 local authority price caps in place under the scheme, starting from £215,000 in North Lincolnshire.
-
How much deposit do I need for a £300,000 home with Your First Home?
With the scheme’s minimum 2.5% deposit, you’d need at least £7,500 for a £300,000 home.
A 20% equity loan would be £60,000, leaving £232,500 to be funded through a repayment mortgage.
Your ability to buy the home would still depend on eligibility, the relevant local property price cap and your lender’s affordability and credit checks.
-
Do I pay interest on a Your First Home equity loan?
The equity loan is interest-free for the first 5 years. The interest rate will then be 1.5% in year 6 and 3% from year 7.
These interest payments are separate from your mortgage and don’t reduce the amount you owe on the equity loan. Further details about collecting interest are due before applications open.
-
Can self-employed people use the Your First Home scheme?
Being self-employed doesn’t stop you using the Your First Home scheme, but you’ll still need to be able to get a mortgage. You can read more about how you’ll be assessed for a mortgage in our guide to getting a mortgage when you’re self employed.
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Do I have to repay the Your First Home equity loan?
Yes. You’ll normally repay the equity loan when you sell your home, although you’ll also be able to repay some or all of it earlier.
The amount you repay is linked to how much your home is worth at the time. If your equity loan represented 20% of the purchase price, you’ll normally repay 20% of your home’s value when you repay it, based on an independent valuation.
See what homes you could afford with the Your First Home scheme calculator
Please note: Your home may be repossessed if you do not keep up repayments on the mortgage. Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.
Sources:
The London Assembly
Your First Home
2026 Budget, HM Treasury
Written by Emma Starkie, Rightmove Editorial Team
Emma works on housing and property content at Rightmove, and… Read moreCopyright © 2000-2026 Rightmove Group Limited. All rights reserved. Rightmove prohibits the scraping of its content. You can find further details here.