The Your First Home scheme: what we know so far

What has been announced?

The Prime Minister announced Your First Home on 27 September 2026. It is aimed at first-time buyers who could afford monthly mortgage payments but struggle to save a large deposit. As announced, it works like this:

• England only.
• First-time buyers only.
• New-build homes only, bought from a developer that has signed up to the scheme.
• A deposit of 2.5% of the price.
• A government equity loan worth 20% of the price, interest-free at first.
• A mortgage for the remaining 77.5%.
• A household income cap and local property price caps, with the figures not yet published.

How the numbers work

On a £230,000 new-build home, a 2.5% deposit is £5,750. The equity loan would be worth £46,000 and your mortgage would cover the remaining £178,250.

Because your mortgage covers 77.5% of the price rather than 95%, monthly repayments are likely to be lower than on a 95% mortgage. But the equity loan is still a debt that has to be repaid, and the terms for repaying it have not been confirmed.

What we don't know yet

These details are expected at the Budget on 28 October 2026 or shortly after:

• The household income cap.
• The property price cap in your area.
• How long the loan stays interest-free, and what it costs after that.
• How repayment works, including whether you repay a share of the home's future value.
• Which developers and mortgage lenders will take part.
• When applications open. Pre-registration is expected to open by the end of 2026.

How does it compare with Help to Buy?

The Help to Buy equity loan, which ended in 2023, worked in a similar way: a government loan towards a new build, interest-free for the first five years. Buyers repaid the same percentage of the home's value when they sold or paid the loan off, so if the home went up in value they repaid more than they borrowed. Help to Buy needed a 5% deposit; Your First Home is expected to need 2.5%.

It has not been confirmed whether Your First Home will be repaid in the same way.

The risks to think about

A smaller deposit makes buying possible sooner, but it leaves less room for things to go wrong. None of these is a reason to rule the scheme out. They are the questions to put to a mortgage adviser once the details are published.

• New builds often cost more than similar older homes nearby, and some of that premium can disappear once the home becomes second-hand.
• With a 2.5% deposit, a small fall in prices could leave you owing more than the home is worth, which can make it harder to remortgage or sell.
• The equity loan has to be repaid eventually, so plan for when interest starts rather than only for day one.
• New builds can be delayed, and a mortgage offer can expire before the home is finished.

What you can do now

• Check you count as a first-time buyer: usually that means you have never owned a home, in the UK or abroad.
• Keep saving. A bigger deposit still means more choice, and you will need money for legal fees, surveys and moving.
• Speak to a mortgage broker about what you could borrow, so you are ready when the scheme opens.
• Don't reserve a new build on the assumption that the scheme will cover it. Wait for the confirmed rules.
• Learn how buying a new build works. It runs differently from buying an existing home, and developers set tight deadlines.

Key takeaway

Your First Home could cut the deposit on a new build to 2.5%, but it isn't open yet and the terms that matter most, the caps and what the loan costs later, are still to come. Use the time to get mortgage-ready and to understand how a new-build purchase works.

Frequently asked questions

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