Your First Home scheme 2026: 2.5% deposits, the 20% equity loan and who can apply
Your First Home is the government's new equity-loan scheme for first-time buyers of new-build homes in England. It was announced on 26 September 2026 and isn't open yet: the full rules are due at the Budget on 28 October 2026. This guide sets out what has been confirmed, what has only been reported, and what the scheme could mean for your mortgage. We'll update it after the Budget.
Last updated 26 October 2026
Quick answer
Your First Home is expected to let first-time buyers in England buy a new-build home with a 2.5% deposit, backed by a 20% government-backed equity loan with an initial interest-free period, from developers that sign up to the scheme. A mortgage covers the rest. It isn't open yet and no launch date has been set: the income cap, local price caps, costs and timetable are due at the Budget on 28 October 2026. Reports say the income cap could be £110,000, or £140,000 in London, but that isn't confirmed.
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Why it's worth checking more than one lender: in our 29 August 2026 run, for a single first-time buyer, £30,000, our calculator estimated a maximum of £174,721 at Darlington Building Society but only £103,422 at Family Building Society, a £71,299 (69%) difference based purely on each lender's published criteria, with no change to income, deposit or circumstances. These are estimates, not offers. Lenders have raised rates since, so today's figures may be lower.
What's confirmed, and what has only been reported?
Confirmed by the government in its announcement of 26 September 2026:
- It is for first-time buyers in England.
- It covers new-build homes from developers that sign up to the scheme, and developers that join make a contribution.
- It is expected to support deposits of 2.5% of the price.
- A government-backed equity loan of 20% of the price sits alongside your mortgage, with an initial interest-free period.
- There will be a household income cap and local property price caps.
- The costs and timetable will be set out at the Budget on 28 October 2026.
Reported, not confirmed
The Times reported on 23 October 2026 that the household income cap could be £110,000, rising to £140,000 in London. Earlier reports said £90,000, and the government described that reporting as speculation, saying the full details were yet to be set out. Until the Budget, treat every income figure as unconfirmed.
Not known yet: the income cap and the local property price caps; how long the interest-free period lasts, and what you pay after it; how and when the equity loan is repaid; which developers take part, and how much they contribute; when you can apply.
How would Your First Home work?
You put down a small deposit, the government lends you 20% of the price through an equity loan, and a mortgage from a lender covers the rest. On a £250,000 new-build, using the expected figures:
| Part of the price | Share | On £250,000 |
|---|---|---|
| Your deposit | 2.5% | £6,250 |
| Government-backed equity loan | 20% | £50,000 |
| Your mortgage | 77.5% | £193,750 |
With a 95% mortgage on the same home you would borrow £237,500 from the lender. Under the scheme the mortgage is 77.5% of the price, which is why the government says buyers could save hundreds of pounds a month compared with a 95% mortgage. The equity loan is still borrowing, though: how long it stays interest-free, what you pay after that and how you repay it will only be known after the Budget.
Who can apply for Your First Home?
From what the government has said so far, you would need to:
- be a first-time buyer;
- be buying in England (Wales, Scotland and Northern Ireland aren't covered);
- buy a new-build home from a developer that has signed up to the scheme;
- have a household income under the cap, which is still to be confirmed;
- buy at a price under the local price cap, also still to be confirmed.
You would also need a lender to approve the mortgage for the rest of the price, on its usual checks of your income, outgoings and credit history.
How is it different from Help to Buy and First Homes?
Help to Buy: Equity Loan also lent buyers part of the price of a new-build in England, but it closed to new applications on 31 October 2022. Your First Home is a new scheme with its own rules, which haven't been published yet.
First Homes works differently: homes are sold to first-time buyers at a discount of at least 30%, and the discount stays with the home when you sell. See our First Homes guide and our round-up of first-time buyer schemes for what is open now.
How would it affect how much you can borrow?
The scheme changes how much deposit you need, not how lenders judge your income. A lender would still test the mortgage part against your income and outgoings, using its own income multiples and affordability checks, which vary a lot from one lender to the next.
Because the mortgage only has to cover 77.5% of the price, the same lender limit stretches further. If the most a lender would lend you is £200,000, that covers the mortgage on a home of up to about £258,000 under the scheme, against about £210,000 with a 95% mortgage, before the scheme's price caps and any lender rules on equity loans. How lenders will treat the equity loan's costs in their affordability checks isn't known yet.
Stamp duty still applies as normal. In England, first-time buyers pay none on the first £300,000 of a home costing up to £500,000; our stamp duty calculator works out the rest.
What can you do now?
- Find out what lenders could lend you. Your income decides the mortgage part, whatever the scheme's final rules.
- Start saving the deposit and costs. A 2.5% deposit is £6,250 on a £250,000 home, plus legal fees, a survey and any stamp duty.
- Look at new-build developments near you. Only developers that sign up will offer the scheme, so ask whether they plan to.
- Check back after 28 October 2026. We'll update this guide with the income cap, price caps and launch date once they're published.
Frequently asked questions
Is the Your First Home scheme open yet?
No. The government announced Your First Home on 26 September 2026, but you can't apply yet and no launch date has been set. The full details, including the costs and the timetable, are due at the Budget on 28 October 2026.
How much deposit will I need for Your First Home?
The scheme is expected to support deposits of 2.5% of the price, alongside a 20% government-backed equity loan. A mortgage would cover the rest, so on a £250,000 home that is a £6,250 deposit, a £50,000 equity loan and a £193,750 mortgage. You would still need money for costs such as legal fees and a survey.
What is the income cap for Your First Home?
The government has said there will be a household income cap but hasn't published it yet. The Times reported on 23 October 2026 that it could be £110,000, or £140,000 in London. Earlier reports said £90,000, which the government called speculation. Treat any figure as unconfirmed until the Budget on 28 October 2026.
Can I use Your First Home in Wales, Scotland or Northern Ireland?
No. Your First Home is a scheme for England. Wales, Scotland and Northern Ireland are not covered by it.
Can I buy any home with Your First Home?
No. It is for first-time buyers buying a new-build home from a developer that has signed up to the scheme. Developers that join will make a contribution. Local property price caps will also apply, but they haven't been published yet.
Will I pay interest on the Your First Home equity loan?
The equity loan is expected to have an initial interest-free period. How long that period lasts, what you pay after it and how the loan is repaid haven't been set out yet.
Is Your First Home the same as Help to Buy or First Homes?
No. Help to Buy: Equity Loan in England closed to new applications on 31 October 2022. Your First Home is a new equity-loan scheme for new-builds in England. It is also different from First Homes, which sells homes to first-time buyers at a discount that stays with the home.
Sources: the government's announcement of 26 September 2026 (gov.uk); the reported income caps, The Times via Mortgage Solutions (23 October 2026).
This guide is information, not advice, and is not a recommendation to take out any specific mortgage product. We are not FCA authorised. The scheme's rules have not been published yet and lender criteria change, so confirm them with the developer, the lender or a qualified, FCA-authorised adviser before you act.
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