New ‘Your First Home’ Scheme Announced for First Time Buyers
The Government has announced plans for a new scheme designed to help first time buyers in England get onto the property ladder.
Called Your First Home, the government has confirmed the scheme as part of the Autumn Budget on 28th October 2026.
The scheme is designed to help eligible first time buyers in England purchase a new build property with a deposit as low as 2.5%, supported by a 20% government equity loan.
The government has now published further details, including eligibility requirements, interest charges and when applications are expected to open.
The announcement is positive news for first time buyers who often found saving a large enough deposit one of the biggest barriers to buying their first home.
How will the Your First Home scheme work?
The scheme is expected to launch in 2027 and the government has now confirmed many of its key features.
Your First Home is expected to be available to eligible first time buyers purchasing a new build property in England from a developer signed up to the scheme. Applicants must generally have a household income of no more than £110,000 outside London or £140,000 in London, purchase within the local property price cap and live in the property as their main home.
Buyers could potentially purchase with:
- A deposit from 2.5%
- A 20% government backed equity loan
- A mortgage for the remaining amount
The equity loan will also have an initial interest free period.
For example, on a qualifying property costing £300,000, a 2.5% deposit would be £7,500. A 20% equity loan would represent £60,000, leaving the remaining purchase price to be funded through the buyer’s mortgage.
The exact mortgage and affordability requirements will become clearer once the full scheme rules are published.
Is Your First Home the same as Help to Buy?
The proposed scheme has similarities to the previous Help to Buy Equity Loan scheme, which helped first time buyers purchase new build properties using a deposit, mortgage and government equity loan.
However, Your First Home will be a new scheme with its own eligibility criteria and rules.
One notable difference already announced is the potential minimum deposit of 2.5%. Under the previous Help to Buy Equity Loan scheme, buyers generally needed a deposit of at least 5%.
The scheme also has household income limits and local property price caps. These vary depending on where you’re buying. You can view the full list of property price caps on the government’s website.
Who will be eligible for Your First Home?
At this stage, we know the scheme is intended for:
- First time buyers
- Buying a home in England
- Purchasing an eligible new build property
- Buying from a developer participating in the scheme
There will also be limits based on household income and the value of the property.
However, there is still quite a lot we do not know.
The Government has yet to publish the detailed eligibility criteria, local property price limits or full application process. We are also waiting for more information about participating mortgage lenders and how mortgages for the scheme will be arranged.
Will you have to repay the Your First Home equity loan?
The government equity loan is not a grant and will eventually need to be repaid. It will be interest free for the first five years, with interest charged at 1.5% in year six and 3% from year seven.
You’ll repay an amount that is linked to the value of your home. For example, if you receive a 20% equity loan, you would normally repay 20% of your property’s value when you repay the loan.
These interest payments are separate from your mortgage repayments and do not reduce the outstanding equity loan
Depending on how the value of your home changes, this means the amount you repay could be higher or lower than the original loan.
The equity loan would normally be repaid when you sell your property, although you can also repay some or all of it earlier.
When can I apply for the Your First Home scheme?
The scheme is not yet open for applications, but the government expects pre-registration to become available by the end of December 2026, with applications opening in February 2027.
First property purchases through the scheme are expected to complete from April 2027 with further guidance on participating developers, mortgage lenders and the application process being published before the scheme opens.
Positive news for first time buyers
Buying your first home can be difficult and for many prospective buyers the challenge is not necessarily being able to afford the monthly mortgage payment. It can be finding the money needed for the deposit in the first place.
A scheme that reduces that initial deposit requirement could therefore make a significant difference to some first time buyers.
At Your Mortgage Expert, we’ll be keeping a close eye on the Your First Home scheme as further information is released.
If you’re hoping to buy your first home, you do not necessarily need to wait for the new scheme before looking at your options. A mortgage adviser can help you understand how much you may be able to borrow, the deposit you might need and the first time buyer mortgage options currently available to you.
If you’re hoping to buy your first home and would like to understand your current mortgage options, our team at Your Mortgage Expert would be happy to help.
We can talk through how much you may be able to borrow, the deposit you may need and the mortgage options that could be available based on your individual circumstances.
You can contact our team by calling 01722 322683, emailing mortgages@your-mortgage-expert.co.uk or completing the contact form on our website.
Your Mortgage Expert is based in Salisbury and provides mortgage advice to clients locally and across the UK by telephone and video.