Your First Home scheme? Here’s the whole story 👀
Updated 28 October 2026: details confirmed in the Budget.
TL;DR
It’s confirmed: first-time buyers in England could buy a new build with a 2.5% deposit and a 20% loan from the government.
The government’s loan is interest-free for five years. Then it’s 1.5% in year six and 3% from year seven, and that interest doesn’t reduce what you owe.
Household income must be up to £110,000 (£140,000 in London). Price caps are set by area, and Wirral’s hasn’t been published yet.
Pre-registration opens by the end of December, with applications from February 2027.
It could be great for a small deposit. But it’s a loan linked to your home’s value, it’s new builds only, and the numbers need to work after year five.
When this scheme was announced last month, we said we’d come back once the facts were out. They’re out.
So here’s the updated version: what’s confirmed, what it actually costs, and what’s still to come.
The short version
You put in at least 2.5%. The government lends you 20%. A repayment mortgage covers the rest.
Say you’re buying a £220,000 new build on the Wirral:
You put in £5,500
The government lends you £44,000
Your mortgage is £170,500
The government’s loan is interest-free for the first five years. In year six, you pay 1.5% a year on it, which is about £55 a month in this example. From year seven, it’s 3%, or about £110 a month. That’s on top of your mortgage payment.
Here’s the bit that’s easy to miss: those interest payments don’t reduce the £44,000 you owe. They’re the cost of having the loan, not repayments.
The home is yours from the day you complete. The government doesn’t own part of it, and it isn’t your landlord.
Who it's for
To use the scheme, you’ll normally need to:
be a first-time buyer
buy a brand-new home in England, from a builder signed up to the scheme
live in it as your main home
have a household income of up to £110,000 a year, or £140,000 in London
get a mortgage from a lender taking part
There’s also a price cap, and it depends on where you’re buying. The government has given some examples:
Middlesbrough: £220,000
North Devon: £320,000
Manchester: £355,000
Reading: £375,000
Outer London: £500,000
Inner London: £650,000
The full list for every area is due shortly. We’ll add Wirral’s here as soon as it’s out.
When it starts
By the end of December 2026: pre-registration opens. It doesn’t commit you to anything, and it should tell you whether you’re eligible and what the price cap is in your area.
February 2027: applications open.
April 2027: the first homes are expected to be bought through the scheme.
What’s still to come
Wirral’s price cap
Which builders and lenders are taking part, and whether that includes any developments near you
The full repayment rules, like minimum amounts and any fees. These will be published before applications open.
What’s genuinely good
Much less to save. On a £220,000 home, you’d need £5,500 instead of the £11,000 a 5% deposit would take. If you don’t have family money to lean on, that matters. A lot.
A smaller mortgage. You’re borrowing about 77.5% of the price from the lender instead of 95%, and a smaller loan compared with the home’s value usually means a better rate.
Five years without interest on the government’s part. That gives you breathing space while you settle in.
A brand-new home. It’ll usually come with a warranty, and it’s usually cheaper to heat.
What's not so good
We’d be doing you a disservice if we stopped there.
It’s a loan, and it’s linked to your home’s value. You pay back 20% of what your home is worth when you repay, not the £44,000 you borrowed. If your home goes up in value, the bill goes up too. If it goes down, so does the bill.
Year six is coming. The government’s loan won’t stay free. Make sure your budget still works once that extra monthly cost starts, not just on day one.
New builds only. Older homes often give you more space for your money, and they’re off the table. You’re also limited to what’s being built, and where.
You can pay extra for “new”. When Help to Buy was around, there were real concerns that builders priced the government’s help into their homes. So compare the price with similar homes nearby, both new and older. And remember that a home is only new once.
Not much of a cushion. With only 2.5% of your own money in, even a small dip in prices could leave you owing more than your home is worth. That can make moving tricky for a while.
Saving into a Lifetime ISA?
One more change from the same Budget. If the home you buy costs more than £450,000, you’ll now get back at least what you paid into your Lifetime ISA. A new First Time Buyer ISA will also replace the Lifetime ISA. We’ll cover that properly once the details are out.
What to do right now
Check whether you’d qualify. You’d need to be a first-time buyer with household income up to £110,000, buying a new build in England to live in.
Pre-register when it opens. There’s no commitment, and it should tell you your local price cap.
Keep saving. Solicitors, surveys and moving all cost money on top of the deposit.
Check your credit report and fix anything that looks wrong before February.
Don’t pay to reserve a new build on the promise that it’ll qualify. Wait until you know.
Don’t assume this is your best option. For some people, a 5% deposit on an older home will work out better.
How we help
We’ll look at Your First Home alongside everything else open to you, and show you what the numbers look like in year one and in year seven.
No pressure. Just honest advice on what’s right for you. One person from start to finish, whole of market, in plain English.
This is general information, not personal advice. Everyone’s situation is different, so the best next step is a chat about yours.
Want a second opinion on whether it suits you, or on the alternatives? Book a free chat, call us on 0151 440 3500 or email hello@ngmortgages.co.uk. Let's get this sorted.
Your home may be repossessed if you do not keep up repayments on your mortgage.