Buying guide
Your First Home Scheme 2027: Deposit, Eligibility and Costs
Your First Home, announced by Prime Minister Andy Burnham, is a planned England-only government scheme that would let qualifying first-time buyers purchase eligible new-build homes with at least a 2.5% deposit, a 20% government equity loan and a repayment mortgage. The equity loan is interest-free for the first five years but must be repaid based on a share of the home's value. Applications are expected from February 2027; they are not open yet.
Applies to: England only. Scheme published 28 October 2026 and expected to accept applications in February 2027. Full terms, price caps and participating providers are not yet final.
Who can use Your First Home?
Your First Home was announced by Prime Minister Andy Burnham on 26 September 2026, with detailed UK government guidance published on 28 October 2026. The planned scheme is for first-time buyers purchasing eligible new-build homes in England from participating developers. It is not available for every existing property, and you must intend to live in the home as your main residence.
The published deposit requirement is a minimum of 2.5% and a maximum of 15% of the purchase price. The household income cap is £110,000 outside London and £140,000 within London. Local property price caps apply. The government has illustrated caps of £375,000 for Reading, £355,000 for Manchester, £650,000 for inner London and £500,000 for outer London. The complete local authority list and detailed eligibility rules were not yet available on 30 October 2026. A participating lender must still approve your mortgage.
Practical checklist
- Confirm that every buyer meets the published first-time buyer requirements when the final rules arrive.
- Check the new-build property's eligibility and your area's final price cap.
- Check household income, affordability and the lender's requirements.
How a £300,000 purchase is funded
With a £300,000 qualifying new-build property and the minimum 2.5% deposit, the buyer contributes £7,500, the government's 20% equity loan is £60,000 and a participating lender provides a repayment mortgage of £232,500. These three amounts add to the purchase price; the equity loan is not a free grant.
Without this scheme, a conventional 95% mortgage illustration would instead involve a £15,000 deposit and a £285,000 repayment mortgage. Saving a smaller initial deposit does not remove mortgage affordability checks or the separate costs of purchasing and maintaining a home.
Example only. The equity loan is repayable; it is not a grant.
- Your deposit£7,500
- Government equity loan£60,000
- Repayment mortgage£232,500
Total: £300,000. Subject to eligibility, lender approval and final scheme rules.
Monthly costs before and after year five
The government says the equity loan is interest-free in years one to five. Its published interest rate is 1.5% in year six and 3% from year seven. Those charges are separate from the mortgage repayment and do not reduce the equity loan balance.
In the government's £300,000 example, a 30-year repayment mortgage with an illustrative 5% mortgage rate costs roughly £1,248 a month under Your First Home. With an unchanged £60,000 equity loan, the separate equity-loan interest would be £75 a month in year six and £150 a month from year seven. Actual mortgage rates, charges and lender offers can differ. Mortgage rate changes can raise or lower the repayment; council tax, insurance, service charges and repairs are additional.
| Period | Mortgage | Equity-loan interest | Combined |
|---|---|---|---|
| Years 1–5 | £1,248 | £0 | £1,248 |
| Year 6 | £1,248 | £75 | £1,323 |
| From year 7 | £1,248 | £150 | £1,398 |
Government example: 30-year repayment mortgage at an illustrative 5% rate; no equity-loan principal repaid. Other homeownership costs excluded. Real mortgage payments may change.
How the equity loan changes with the home's value
The amount you normally repay is linked to the home's value at repayment, not simply the original cash loan. If the equity loan represents 20% when you purchase, you would normally repay 20% of the home's independently valued market price when repaying it. A higher home value increases the amount owed; a lower value reduces it.
For example, a £60,000 equity loan on a home bought for £300,000 becomes £64,000 if a later valuation is £320,000, or £56,000 if the value has fallen to £280,000. These are illustrations, not predictions. Interest payments do not pay off the equity principal. Independent valuations and possible fees may apply, subject to the final published terms.
| Value at repayment | 20% equity loan owed | Difference |
|---|---|---|
| £280,000 | £56,000 | -£4,000 |
| £300,000 | £60,000 | £0 |
| £320,000 | £64,000 | +£4,000 |
Illustration based on the government's published 20% share. It excludes interest charges, fees and any partial loan repayment.
When can you register and apply?
As of 30 October 2026, customer applications are not open. GOV.UK expects pre-registration before the end of December 2026, full applications from February 2027 and the first property sales under the scheme from April 2027. Pre-registration will not commit someone to buying under the scheme.
The government says it will publish participating developers and lenders, full property price caps, application guidance, repayment instructions and scheme terms before opening. Avoid paying an unofficial website to reserve an application or treating a predicted lender offer as guaranteed.
Practical checklist
- Use GOV.UK to check when official pre-registration becomes available.
- Research affordable new-build properties without assuming they will qualify.
- Build a deposit and buying-cost budget that still works if the scheme is unavailable.
What other costs and risks should you budget for?
A reduced deposit does not remove conveyancing fees, mortgage and valuation costs, property taxes where applicable, insurance, council tax, estate or service charges, moving expenses, maintenance or emergency savings. A new-build premium or property value fall could also affect your options if you later sell or remortgage.
Compare the total cash needed and likely repayment at different mortgage rates. Ask a regulated mortgage adviser or lender about affordability, and ask your conveyancer to explain the equity-loan legal documents and repayment triggers before committing. The scheme is not necessarily the cheapest option for every eligible buyer.
Do not confuse Your First Home with First Homes
Your First Home and First Homes are different programmes. Your First Home is the planned 2027 equity-loan scheme with a minimum 2.5% buyer deposit for qualifying new-build properties in England. The existing First Homes scheme is based on a discount to the property's market value and has its own eligibility and resale conditions.
A government-supported 95% loan-to-value mortgage is different again: it does not by itself supply the buyer's deposit or give the buyer an equity loan. Compare the real purchase price, deposit, mortgage, ongoing payments, restrictions and how much must be repaid on sale before choosing a route.
What to read next
Continue with the most relevant next step, or explore the buying journey.
References and further reading
These are the original legal, regulatory and professional sources used to inform this article. MMG explains the key steps above so you do not have to follow external links to find the answer. Circumstances and UK jurisdiction can affect the rules, especially for legal or financial decisions.
- GOV.UK: Your First Home scheme guidance (28 October 2026)(opens in a new tab)
- GOV.UK: Budget 2026 funding and scheme timetable(opens in a new tab)
- GOV.UK: First Homes scheme (distinct discount programme)(opens in a new tab)
- MoneyHelper: Understanding mortgage repayments(opens in a new tab)
My Move Guide publishes general information, not personalised legal, tax, mortgage or financial advice. Estimates and requirements differ by location and circumstances.