Your First Home is a new government equity loan scheme for eligible first-time buyers purchasing a new-build home in England. The published guidance describes a minimum 2.5% deposit, a 20% government equity loan and a repayment mortgage from a participating lender.
Applications are not open as at 3 November 2026. They are expected to open in February 2027. This guide uses the latest published guidance rather than the September announcement, and distinguishes confirmed headline terms from details still to come.
How does the Your First Home scheme work?
The government loan reduces the amount you initially need to fund through your deposit and mortgage. It is an equity loan linked to the property’s value, not a cash gift or a discount on the purchase price.
A £300,000 purchase example
- Buyer’s minimum deposit: £7,500, or 2.5%.
- Government equity loan: £60,000, or 20%.
- Repayment mortgage: £232,500, or 77.5%.
This is a funding illustration, not a mortgage offer. You still need to pass the participating lender’s credit and affordability checks and budget for buying costs.
Who can use Your First Home?
The current guidance says buyers will normally need to be first-time buyers, purchase an eligible new-build as their main home and obtain a participating lender’s mortgage. Published annual household income limits are £110,000 outside London and £140,000 within London. Full eligibility rules are still due before applications open.
Which properties qualify?
The home must be within the applicable local price cap and supplied by a participating developer. Do not assume every new development or property marketed to first-time buyers qualifies.
What are the local price caps?
The government has published a local authority price cap list. It lists Buckinghamshire at £430,000 and Barnet and Brent at £500,000. Check the precise authority for the property rather than relying on its postal town or a general description such as “London”.
What does the equity loan cost after five years?
The loan is interest-free for the first five years. Published rates are 1.5% in year six and 3% from year seven. Interest payments are separate from the mortgage and do not reduce the equity loan balance. Further collection details are due before launch.
Budget beyond the initial payment
Write a household budget for the first five years and another for the period when equity loan interest becomes payable. Include the possibility that your mortgage deal ends at a different time, alongside service charges, estate charges, insurance and maintenance. A smaller initial mortgage payment does not make those future costs disappear.
How much will I repay when I sell?
The amount is normally linked to the government’s percentage share of the home’s value at repayment, supported by an independent valuation. If you received a 20% equity loan, repayment will normally be 20% of that later value. It can rise or fall with the property value.
Why this matters to your plans
Think about how long you expect to stay and whether your plan depends on remortgaging to repay the equity loan. Future borrowing will depend on your finances, valuation and lender options at that time. Do not assume your salary or property value will increase enough to make the exit easy.
Can I repay early?
The guidance says some or all of the loan can be repaid before selling. Full rules on minimum repayments, valuations, fees and selling or remortgaging are still to be published. Get those terms and independent legal advice before committing.
When can I apply, and what can I do now?
The published timetable provides for pre-registration and further guidance by the end of December 2026, applications in February 2027 and first sales in April 2027. Dates and operational details should be checked again as launch approaches.
Prepare without assuming eligibility
- Establish your deposit and separate budget for purchase costs.
- Gather income evidence and details of debts and dependants.
- Check the property’s local authority and price cap.
- Compare buying through the scheme with suitable alternatives.
- Wait for confirmed lender, developer and application information.
Use our first-time buyer mortgage service and mortgage comparison guide to prepare. Contact TLA Finance to review your buying budget; an enquiry to us is not government pre-registration or a scheme application.
Official sources: GOV.UK: Your First Home guidance, updated 3 November 2026; GOV.UK: local authority price caps. Government information is summarised under the Open Government Licence v3.0. The scheme applies to England.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This is general information, not a personal recommendation. Mortgage availability, affordability and lending criteria depend on your circumstances and can change. Information checked on 3 November 2026.
