October 13, 2026
The government announced a new first time buyer scheme on 26 September 2026 called Your First Home. The headline is a 2.5% deposit, which is half what most lenders ask for on their lowest deposit deals. Since then I have had the same question from clients, from people at the school gates and from one developer: is this real, and should I wait for it?
Here is what has actually been confirmed, what has not, and how the numbers work if it lands in the shape ministers have described. I have put two calculators in so you can run your own figures rather than take mine.
Your First Home is an equity loan scheme for England. The Ministry of Housing, Communities and Local Government published the announcement on 26 September 2026 and said the scheme is "expected to support 2.5% deposits, backed by 20% government-backed equity loans". It is aimed at first time buyers purchasing a new build property from a developer signed up to the scheme.
If that structure sounds familiar, it should. It is close in shape to the old Help to Buy equity loan, which closed to new applicants in 2022 with the final purchases completing in 2023. The government has not called this a direct replacement, but any first time buyer who looked at Help to Buy will recognise the mechanics.
The full detail, including the cost, the caps and the launch timetable, is due at the Budget on Wednesday 28 October 2026. Nothing is open yet. There is no application form, and anyone telling you they can register you today is not telling you the truth.
Three pieces of money buy the house. Your own deposit, a loan from the government secured against the property, and a normal mortgage from a lender for the rest.
On a £300,000 new build, the split described would be a £7,500 deposit from you, a £60,000 government equity loan and a £232,500 mortgage. Compare that with a 5% deposit purchase on the same house: £15,000 of your own money and a £285,000 mortgage.
So two things change at once. You need roughly half the cash up front, and you need a noticeably smaller mortgage. The second part matters more than most people expect, because the size of the mortgage drives both what you have to prove you can afford and what you pay each month.
What has not changed is that the equity loan is borrowed money. It is not a gift and it is not a discount. The government takes a 20% stake in your home and, in a Help to Buy style scheme, you repay 20% of whatever the property is worth when you repay it, not the pounds you originally borrowed. If your home goes up in value, the amount you owe goes up with it.
The government said buyers could save "hundreds of pounds per month" compared with a 95% mortgage. That claim rests on two things: borrowing less, and the fact that lower loan to value usually attracts a better rate. Neither is guaranteed in your case, and the saving is only part of the picture while the equity loan is sitting behind it.
The calculator below lets you test it. The rates in the boxes are example figures to get you started, not rates on offer, so change them to whatever you have actually been quoted.
Two honest caveats on that number. First, the equity loan starts interest free but the length of that period has not been confirmed, so at some point there may be a further monthly cost. Second, new build service charges and estate management fees are real money and do not show up in any mortgage calculator. If you want to sanity check the wider cost of buying, our mortgage calculators cover repayments, stamp duty and loan to value, and the first time buyer costs page lists the bills people forget.
Short list, and it is worth keeping it short, because a lot of what is circulating is guesswork dressed up as fact. From the government announcement on 26 September 2026:
This is the longer list, and it contains most of the things that would decide whether the scheme works for you.
That last one is not a small detail. A scheme is only as good as the lenders willing to lend alongside it. When Help to Buy ran, some lenders were enthusiastic, some were slow and a few sat it out, and the gap between their rates was wide. We will not know where the market lands until after the Budget.
Worth setting the two side by side, because plenty of people reading this will have friends who used the old scheme.
| Feature | Your First Home, as described | Help to Buy, 2021 to 2023 |
|---|---|---|
| Minimum deposit | 2.5% | 5% |
| Equity loan | 20% | Up to 20%, 40% in London |
| Interest free period | Not confirmed | 5 years |
| Income cap | Yes, level not confirmed | None |
| Price caps | Local caps, levels not confirmed | Regional caps |
| Property type | New build from a participating developer | New build from a registered builder |
If you already have a Help to Buy loan from the old scheme and you are wondering how to clear it, that is a separate job and we have written it up in our guide on how to pay back Help to Buy.
One more point of confusion worth clearing up. Your First Home is not the same thing as the First Homes scheme, which offers a discount of at least 30% off market value on certain new builds. Different scheme, different mechanics. We cover that one on our First Homes scheme page.
From what we know, this looks most useful to buyers in one specific position: a decent, stable income, but not much saved. If you can comfortably afford a monthly payment and the deposit is the only thing standing in your way, halving the cash requirement is a genuinely big deal.
It is likely to suit you less well if any of these apply. You want a period property or anything that is not a new build, because the scheme does not cover you. Your household income is above the cap, whatever the cap turns out to be. You are buying above the local price cap. Or you expect to move again within a few years, because selling with an equity loan attached adds a layer of admin and cost.
There is also the new build premium to think about. New builds often carry a price premium over an equivalent second hand home, and a scheme that applies only to new builds does not make that premium disappear. The Nationwide House Price Index published on 1 October 2026 put the average UK house price at £274,251, with annual growth down to 0.8% from 1.6% the month before. In a flat market, paying a premium is less comfortable than it is in a rising one. That is a point to weigh, not a reason to rule it out.
If you are weighing a new build against an older property more generally, our new build mortgage advice page goes through the practical differences, including offer timescales on a property that is not finished yet.
Nothing about this scheme is available today, so the useful question is what to do in the meantime. My answer is the same as it would be without the scheme, which is rather the point.
Get your figures straight. Know what you can borrow and what you can afford, which are two different numbers. An agreement in principle gives you a working figure and makes you credible with a developer's sales office.
Keep saving. A 2.5% deposit is a floor, not a target. More deposit means more lenders, more products and more room if the valuation comes in low. If family are helping, our guide on the bank of mum and dad covers how lenders treat gifted deposits.
Do not stop looking at what exists now. There are already 5% deposit mortgages on the market, and a handful of lenders go further still, which we cover in our guide to the 99% loan to value mortgage. Shared ownership is another route that suits some buyers better than an equity loan. A scheme that may or may not open in six months is not a reason to put your life on hold.
Be careful what you commit to. If a developer is pushing you to reserve a plot now on the basis that the scheme will cover you later, slow down. The eligibility rules do not exist yet. Reservation fees are usually not refundable, and I would not want a client paying one against a scheme that has not been written.
No launch date has been announced. The government said full details and implementation timelines will come at the Budget on 28 October 2026, and pre registration is expected to open by the end of 2026 according to the HomeOwners Alliance. Until then there is nothing to apply for.
Not as described. The announcement is specific that it covers new build property bought from a developer signed up to the scheme, so second hand homes look to be outside it.
No. It is a loan secured on your home, and in a Help to Buy style scheme you repay a percentage of the property's value rather than the cash sum you borrowed. It starts interest free, but the length of that period has not been confirmed.
Plenty of commentators think demand side schemes tend to support prices, and that argument was made about Help to Buy too. Nobody can tell you what prices will do. What I would say is that you should buy a house because it works for you at the price you are paying, not on a view about what the market does next.
It depends entirely on your circumstances, and that is not a dodge. If you have a 2% deposit and a good income, waiting for the detail may well be sensible. If you have 10% saved and you have found the right house, waiting for a scheme with no published rules and no confirmed start date is a real risk. Come and talk it through before you decide either way.
We are a fee free, whole of market brokerage based in Romsey, and we work with first time buyers across Hampshire and the rest of the UK. When the detail lands at the Budget we will update this guide, and if the scheme is right for you we will say so. If it is not, we will say that too, and then look at what else will get you into a home.
If you want to run your own numbers first, start with our first time buyer mortgage advice page. If you would rather just talk it through, get in touch and we will go through it properly, with no fee and no pressure.
Your home may be repossessed if you do not keep up repayments on your mortgage. The figures in this guide are illustrations based on the sources named and are not a quote, an offer or a recommendation. Your First Home scheme terms are not final and may change or not proceed. Advice should always be based on your own circumstances.
