Oct 29, 2026 - Written by Oliver Peace
The government has published the first official details of Your First Home, the new equity loan scheme for first-time buyers purchasing new build homes in England. Here is what the published guidance says, what it means in practice, and how we can help you use it. We will keep this page updated as each new piece of detail is released, so bookmark it and check back.
What Your First Home is
Your First Home is a government equity loan for first-time buyers purchasing a new build home in England. You put in a deposit of as little as 2.5%, the government lends you 20% of the price as an equity loan, and a repayment mortgage from a participating lender covers the rest. The equity loan is interest-free for the first five years.
You own the home outright from completion. The government is not a joint owner and is not your landlord. Your mortgage lender carries out the usual affordability and credit checks.
Applications are not yet open. The first loans will complete from April 2027.
How the money stacks up
The government's own example uses a GBP 300,000 home.
| Your First Home | Standard 95% mortgage | |
| Your deposit | GBP 7,500 (2.5%) | GBP 15,000 (5%) |
| Government equity loan | GBP 60,000 (20%) | None |
| Mortgage | GBP 232,500 (77.5%) | GBP 285,000 (95%) |
The deposit halves and the mortgage falls by GBP 52,500. That is the whole point of the scheme: a smaller deposit and a smaller mortgage, in exchange for the government holding a 20% stake that you repay later.
Who can use it
To qualify you must:
- be a first-time buyer
- be buying a new build home in England within the local price cap
- live in the home as your main residence
- have a total annual household income of GBP 110,000 or less outside London, or GBP 140,000 or less in London
- be able to get a mortgage from a participating lender
The income caps are far higher than many expected. For most households outside London, income will not be the limiting factor. The price cap will be.
The government says full eligibility rules will be published before applications open.
Price caps
Caps are set by local authority, not by region. The guidance gives six examples:
| Area | Price cap |
| Inner London (London Plan 2021 definition) | GBP 650,000 |
| Outer London (London Plan 2021 definition) | GBP 500,000 |
| Reading | GBP 375,000 |
| Manchester | GBP 355,000 |
| North Devon | GBP 320,000 |
| Middlesbrough | GBP 220,000 |
The full list for every local authority is due to be published shortly. Pre-registering will show you the cap that applies where you want to buy.
The equity loan: Interest and repayment
Interest. Nothing for the first five years. In year 6 you pay 1.5% a year on the loan. From year 7 onward you pay 3% a year. Interest is paid separately from your mortgage and does not reduce the loan balance. The government will publish how it is collected before applications open.
This is simpler and cheaper than Help to Buy, where the interest started at 1.75% and rose every year with inflation plus 2%.
Repayment. The loan is a share of your home, not a fixed sum. When you repay, you pay back 20% of what the home is worth at the time, based on an independent valuation.
| Home valued at | You repay |
| GBP 280,000 | GBP 56,000 |
| GBP 300,000 (purchase price) | GBP 60,000 |
| GBP 320,000 | GBP 64,000 |
You normally repay when you sell, but you can repay some or all of it earlier. Rules on minimum repayments, valuations, fees, selling and remortgaging will be published before applications open.
What it costs each month
The government's example assumes a GBP 300,000 home and a 30-year repayment mortgage at 5%.
| Standard 95% mortgage | Your First Home | |
| Mortgage payment | GBP 1,530 | GBP 1,248 |
| Equity loan interest, years 1 to 5 | None | GBP 0 |
| Equity loan interest, year 6 | None | GBP 75 |
| Equity loan interest, from year 7 | None | GBP 150 |
| Total, years 1 to 5 | GBP 1,530 | GBP 1,248 |
| Total, from year 7 | GBP 1,530 | GBP 1,398 |
Even once the 3% interest starts, the monthly outlay is GBP 132 lower than a 95% mortgage on the same home at the same rate. These figures exclude mortgage fees, insurance, council tax, service and estate charges, and maintenance.
