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What is the government's 'Your First Home' scheme, and could it help you buy?

Hannah Brewer , PR & Social Executive

Last updated 13 Nov 2026

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Read time 5 minutes

Key takeaways

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You could buy with a 2.5% deposit, rather than the 5% often needed for a low-deposit mortgage. 

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The government would provide an equity loan worth 20% of your home's purchase price, interest-free for the first five years. 

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The scheme is for eligible first-time buyers purchasing new-build homes in England, with income and property price limits. 

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Applications are expected to open in February 2027, with the first purchases from April. 

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The equity loan must be repaid, and the amount you owe will change if your home's value changes. 

What is the 'Your First Home' scheme

Disclaimer: This article provides general information only and is not intended to constitute legal, financial, mortgage or tax advice. Eligibility depends on your individual circumstances and the scheme rules in force at the time of your purchase. You should check the latest government guidance and speak to your mortgage advisor and conveyancer before making any decisions. Information accurate as of November 2026.

Saving for your first home can feel like a big hurdle. Even when you're confident you could afford monthly mortgage payments, finding enough money for a deposit isn't always easy. 

The government's new Your First Home scheme aims to make that first step easier. It's designed to help eligible first-time buyers in England purchase a new-build home with a deposit as low as 2.5%. 

But there's more to consider than the smaller deposit. Here's how the scheme is expected to work, who could qualify and what it might mean for you. 

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How does Your First Home work?

Your First Home combines three sources of funding to help you buy a property: 

  1. A deposit of at least 2.5% from you. 
  2. A government equity loan worth 20% of the purchase price. 
  3. A repayment mortgage from a participating lender to cover the rest. 

Because you're borrowing less through your mortgage, your monthly mortgage payments could be lower than they'd be with a standard 95% mortgage. 

You'll own your home from completion. The government won't be your landlord or a joint owner, but you'll have an equity loan to repay.

What could it look like for a £300,000 home?

 

Your First Home

Standard 95% mortgage

Your deposit

£7,500

£15,000

Government equity loan

£60,000

£0

Your mortgage

£232,500

£285,000

With Your First Home, you'd need £7,500 less for the deposit in this example. 

That's a meaningful difference if saving for a deposit is what's holding you back. But remember, the £60,000 equity loan isn't a gift. You'll need to repay it under the scheme's rules. 

 

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