Your First Home Scheme: What’s Been Announced So Far

Facts at a Glance

Your First Home: What’s Been Announced

Announced: 26 September 2026 by the Government

Who it’s for: First-time buyers in England

Property type: New-build homes from participating developers

Deposit: As low as 2.5%

Government support: Up to a 20% government-backed equity loan

Interest: An initial interest-free period applies, although the length has not yet been confirmed

Eligibility: A household income cap and local property price caps will apply

Full details: Further costs, implementation and scheme details are expected to be confirmed at the Budget

Last updated: 30 September 2026

This article will be updated as further details are confirmed.

A New Option for First-Time Buyers

Saving a deposit is one of the biggest hurdles for people trying to buy their first home. The latest English Housing Survey found that the median deposit paid by first-time buyers was £36,500 in 2024–25, while the average was £78,131.

Even when a buyer can afford the monthly mortgage payments, building up a large enough deposit can take years, particularly alongside rent and other household costs.

The Government has now announced a new Your First Home scheme, designed to help some first-time buyers in England overcome that deposit barrier.

The headline feature is the possibility of buying a new-build home with a deposit of 2.5%, supported by a government-backed equity loan of up to 20% of the property’s value. The scheme will apply to eligible new-build properties from developers that sign up to it.

However, this is still an announcement rather than a fully operational mortgage scheme. Important details, including the income and property price limits and how the scheme will work in practice, have not yet been confirmed.

So what do we actually know so far, and what could the scheme mean if you’re hoping to buy your first home?

Your First Home: What Has Been Announced So Far?

The Government announced Your First Home on 26 September 2026 as a new equity loan scheme for first-time buyers in England.

The announcement says the scheme is expected to support deposits of 2.5%, alongside government-backed equity loans of up to 20% of the property’s value. It will apply to new-build properties purchased from developers that have signed up to the scheme.

The Government also says the equity loan will have an initial interest-free period. The length and wider terms of that period have not yet been confirmed. There will also be a household income cap and local property price caps, with the details expected to be set out at the Budget. Developers will also be expected to contribute when they sign up to the scheme.

What has been confirmed?

At this stage, we know that the scheme:

• Is aimed at first-time buyers in England
• Is focused on new-build homes
• Requires the property to be from a participating developer
• Is expected to support deposits as low as 2.5%
• Could provide a government-backed equity loan of up to 20%
• Will include an initial interest-free period on the equity loan
• Will have household income and local property price limits

What hasn’t been confirmed?

The Government has not yet published the full operational details, including the precise income limits, property price caps, costs and implementation arrangements.

Read the official GOV.UK announcement

How Could the 2.5% Deposit Work?

The 2.5% deposit is one of the most talked-about parts of the announcement.

In simple terms, a buyer purchasing a £300,000 eligible new-build property would need a £7,500 deposit if the scheme ultimately allows a 2.5% deposit on that purchase.

The remaining funding would not simply come from a standard 97.5% mortgage. The Government says the scheme is expected to combine the buyer’s deposit with an equity loan of up to 20% of the property’s value, with the rest potentially covered by a mortgage. The actual mortgage available would still depend on the buyer’s circumstances, the property’s value, lender criteria and the final rules of the scheme. A smaller deposit can reduce the amount a buyer needs to save upfront, but it does not automatically mean the overall cost of buying a home will be lower.

We’ll look at what the 2.5% deposit could actually mean for affordability in more detail in our upcoming guide.

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What Is the Government Equity Loan?

An equity loan is different from a cash grant.

Under the proposed Your First Home scheme, the Government says eligible buyers could receive an equity loan of up to 20% of the property’s value. The loan would form part of the funding for the purchase, rather than being money that the buyer simply receives and keeps. The announcement also says the equity loan will have an initial interest-free period.

There are still important questions around how and when the loan will be repaid, what happens after the interest-free period and how changes in the property’s value could affect the amount owed.

These details will become clearer once the full terms are published.

Who Could Be Eligible?

The scheme is being designed for first-time buyers in England purchasing eligible new-build homes from participating developers.

The Government has also confirmed that a household income cap and local property price caps will apply.

Having a 2.5% deposit will not, by itself, mean that every first-time buyer will qualify. The type of property, its location, its price and the buyer’s circumstances will all matter.

The exact income and property price limits have not yet been confirmed.

What Could This Mean for First-Time Buyers?

For some first-time buyers, the biggest potential benefit could be the amount they need to save before they can consider buying.

A 2.5% deposit is significantly smaller than the 5%, 10% or larger deposits buyers may otherwise consider. The proposed government equity loan could also reduce the amount that needs to be funded through the main mortgage. This could be relevant to people who may be able to afford mortgage payments but are struggling to build a larger deposit while paying rent and other household costs.

There are still important considerations. A smaller deposit does not automatically make a property affordable. Buyers will still need to meet mortgage affordability requirements, while the new-build restriction means there will be a narrower choice of properties. The property’s price, the mortgage available, the future costs of the equity loan and changes in property value could all affect the overall picture.

The scheme could remove one barrier to buying a home, but it will not remove every barrier.

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Why Is the Scheme Focused on New Builds?

Your First Home is focused on new-build homes from participating developers, rather than the wider housing market.

The Government says the scheme is intended to support new-build housing and increase opportunities for first-time buyers, with developers also contributing to the scheme.

For buyers, this means the choice of properties will be limited to eligible new builds from participating developers. It also raises an important question: could buyers end up paying more for a new-build property compared with a similar existing home?

New-build properties can have different pricing, mortgage and resale considerations, so this is something first-time buyers will need to weigh up when the full scheme details are available.

If you’re considering a new-build home, you can also read our guide to New Build Mortgages.

What We Still Don’t Know

There is still a lot to learn before first-time buyers can properly assess whether Your First Home is suitable for them.

The key unanswered questions include:

• What will the household income limit be?
• What will the local property price caps be?
• How long will the equity loan remain interest-free?
• What will happen after the initial interest-free period?
• How and when will the equity loan need to be repaid?
• What will the application process look like?
• Which developers will participate?
• Which lenders will offer mortgages alongside the scheme?
• When will the scheme actually become available to buyers?
• What other costs or conditions will apply?

Further details, including costs and implementation timelines, are expected to be confirmed at the Budget. Until then, it is important to distinguish between what has been announced and what is still speculation. 

Should First-Time Buyers Start Planning Now?

You don’t need to wait for every detail of the scheme before getting your finances into shape. If you’re hoping to buy your first home, now could be a useful time to look at your current position.

Start by considering:

• How much deposit have you already saved?
• What could you realistically save each month?
• What are your current income and monthly commitments?
• Roughly how much could you potentially borrow?
• Which areas are you considering?
• Would you be open to buying a new-build property?
• Are there particular property types or price ranges you’re targeting?

You don’t need to make a decision about Your First Home yet. The purpose of doing this groundwork is to understand your starting point. Once the full scheme details are available, you’ll be in a better position to assess whether an eligible property and mortgage could fit your circumstances.

Not sure where you stand yet? You can start by getting a clearer picture of your potential borrowing and deposit position with our mortgage calculator.

 
  
 
  
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How Everest Mortgages Can Help First-Time Buyers

If you’re a first-time buyer, understanding how much you could potentially borrow is useful whether or not you ultimately use a government scheme.

At Everest Mortgages, we can help you look at your mortgage position, including your income, commitments, deposit and potential borrowing options. As a whole-of-market mortgage broker, we can compare mortgage options from across the mortgage market rather than only considering products from one lender.

Your First Home has not yet been fully implemented, so we cannot currently arrange the scheme itself. Once the final rules, participating lenders and application process are confirmed, we can assess how it may fit alongside the wider mortgage options available to you.

In the meantime, you can start preparing by understanding your potential borrowing position and what you may be able to afford.

Read our First-Time Buyer Guide
Use our Mortgage Calculator

What Happens Next?

Your First Home has been announced, but the full scheme has not yet been confirmed.

The Government is expected to provide further details at the upcoming Budget, including the costs and implementation timeline. As more information is released, we’ll update this guide with the confirmed eligibility criteria, costs, lender and developer participation and other important details.

For now, the key point is simple: the headline 2.5% deposit and up to 20% government equity loan have been announced, but the full rules are still to come.

Your First Home FAQs

There are still important details to be confirmed about Your First Home. Here are some of the most common questions first-time buyers may have about the scheme and what we know so far. 

What is the Your First Home scheme?

Your First Home is a new Government equity loan scheme announced for first-time buyers in England. It is expected to support 2.5% deposits on eligible new-build homes, alongside a government-backed equity loan of up to 20%.

Can first-time buyers buy with a 2.5% deposit?

The Government says the scheme is expected to support deposits of 2.5%. However, the full eligibility and operational rules have not yet been confirmed.

What is the 20% government equity loan?

It is a government-backed equity loan of up to 20% of the property’s value. It is part of the funding for the purchase rather than a cash payment that the buyer simply keeps.

Can I use Your First Home to buy an existing property?

The announcement currently describes the scheme as applying to new-build properties purchased from developers that have signed up to the scheme.

Is Your First Home available across the UK?

The announced scheme is for first-time buyers in England. The announcement does not describe it as a UK-wide scheme.

Who could be eligible?

The scheme is aimed at first-time buyers, with a household income cap and local property price caps applying. The exact limits have not yet been confirmed.

Is the government equity loan interest-free?

The Government says the equity loan will have an initial interest-free period. The length and full terms of that period have not yet been confirmed.

When will more details be announced?

Further details, including costs and implementation timelines, are expected to be announced at the Budget.

Can I start preparing now?

Yes. You can start by reviewing your deposit, income, commitments, potential borrowing and preferred areas. This can help you understand your position before the final scheme rules are available.

Thinking About Buying Your First Home?

If you’re a first-time buyer, you don’t have to wait for the full Your First Home details before understanding your mortgage position.

We can help you look at your potential borrowing, deposit and mortgage options now, so you’ll have a clearer idea of what may be possible when the scheme’s final rules are confirmed.

Book a Free Mortgage Consultation

Important Information

Your First Home is a Government policy that has been announced but has not yet been confirmed in full. The information may change as further details are announced. Everest Mortgages will update this article as the Government publishes additional information.

Mortgage availability, affordability and eligibility depend on individual circumstances and lender criteria. Your home may be repossessed if you do not keep up repayments on your mortgage.