The government has announced Your First Home in England. Explore its expected 2.5% deposit and 20% equity-loan design, and what awaits Budget confirmation.
Your First Home: England's Announced Equity Loan Scheme
Government announcement — 26 September 2026
The government has announced Your First Home, a new equity-loan scheme for first-time buyers in England. Its announced outline is expected to support a 2.5% buyer deposit backed by a 20% government-backed equity loan for a new build from a signed-up developer. The scheme is not yet open for applications. Full terms, including income and local property-price cap levels, costs and implementation timings, are due at the Budget next month. Read the Number 10 announcement and the government press release.
A smaller deposit and easier affordability could bring home ownership closer for many First-time Buyers in England.
The government has announced Your First Home for first-time buyers in England. The official announcement suggests a 2.5% deposit and 20% government-backed equity loan.
This is an announcement, not an operational launch, however we can email you more information and get the process started.
What is the Your First Home scheme?
Full scheme terms are due at next month's Budget.
Your First Home is the government's announced equity-loan scheme for eligible first-time buyers in England purchasing a new-build home from a developer signed up to the scheme.
The government expects it to support a 2.5% buyer deposit alongside a 20% government-backed equity loan.
The equity loan will have an initial interest-free period, but its duration and charges have not been set out. This element of the scheme will boost your chances of passing a mortgage lender's affordability tests.
The scheme is aimed at first-time buyers in England, especially those who struggle to raise a deposit without help from family.
The government says purchases will be new-build homes from signed-up developers, subject to a household-income cap and local property-price caps. The thresholds have not yet been announced and are expected at the Budget.
Number 10 says pre-registration is set to open by the end of 2026; the date when full applications might open remains unknown.
We do not yet know the income or local price-cap levels, whether every co-buyer must be a first-time buyer, any age restriction, which developers or homes will be included, lender participation or how applications will be assessed.
This scheme helps with both deposit and affordability requirements, but a lender still needs to assess income, spending, existing debts, credit, and the property before offering a mortgage.
What does a 2.5% deposit mean?
The government expects the Your First Home Scheme to support a 2.5% buyer deposit. That's £2,500 for every £100,000 of property value.
Home price
2.5% buyer deposit
£200,000
£5,000
£250,000
£6,250
£300,000
£7,500
Explore the deposit with our LTV calculator
Change any value and the other figures will update automatically.
Changing the property value keeps the mortgage amount and recalculates your deposit or equity
and LTV.
Deposit or equity
£
£0£250,000
Mortgage amount
£
£0£250,000
Loan-to-value
90%
%
0%100%
No mortgage borrowing needed
With these figures, the property value is fully covered by your deposit or equity. No mortgage
borrowing is required.
Small mortgage amount
Fewer lenders offer mortgages below £25,000, so your options may be limited. Product and legal
fees can also have a greater impact on the overall cost of a smaller mortgage.
Low property value
Fewer lenders offer mortgages on properties valued below £50,000. Minimum property values vary
by lender and property type.
Buying to let?
If this is a buy-to-let purchase, most lenders cap borrowing at 75–80% loan-to-value, with some
specialist options reaching 85%. This cap applies to buy-to-let mortgages only — residential lending
typically extends to 95%.
High-LTV residential mortgage
Residential mortgages above 95% LTV have limited availability and often require a specialist
mortgage product or scheme. Talk to your mortgage adviser about your options.
No deposit or equity buffer
You have no deposit or equity buffer. A fall in the property's value could leave you owing more than
it is worth. No-deposit residential mortgages have limited availability and specific eligibility
requirements. Speak to your mortgage adviser.
This shows the arithmetic for a mortgage-only, 97.5% LTV illustration. It does not model the announced equity loan, test Your First Home eligibility, or mean a 97.5% mortgage will be available under this scheme.
For a property valued at £250,000, the calculator currently shows a £25,000 deposit or equity (10%) and a £225,000 mortgage (90% LTV).
This is a mortgage-only illustration, not a projection of the Your First Home financing package. The announced scheme is expected to include an equity loan. This calculator cannot add an equity loan to the mix.
Who or what is a first-time buyer?
Your First Home's own first-time-buyer definition has not been published. See our first-time buyer eligibility guide for the wider mortgage checks.
Generally, a first-time buyer is someone who has never owned a residential property in the last tix months. But the precise definition depends on the scheme, lender and tax rules. Owning a home abroad, inheriting a share in a property or applying with someone who has owned before can matter.
Why could this help first-time buyers?
Deposit: For buyers without family support, a 2.5% deposit of the property value could shorten the time needed to save.
20% Equity Loan: For buyers with affordability issues, they would pay 77.5% LTV mortgage rates, not a 95% LTV mortgage rates. They would also be paying those mortgage rates on a smaller mortgage amount.
These two factors, meaning access to homeownership and access to affordable homeownership, could open doors for first-time buyers.
What are the disadvantages to first-time buyers?
There are trade-offs. An equity loan can create a separate amount to repay when selling or buying out the government's interest, which may change with the home's value depending on the final terms.
A small initial cash deposit offers a limited buffer if the value falls. Given the new build premium on house prices, this could lead to negative equity.
New-build availability, regional prices and local caps may also determine whether a suitable home qualifies.
Compare the full cost and obligations, not just the minimum cash deposit.
Why could this help builders deliver more homes?
The scheme also has a housing-supply aim alongside helping first-time buyers: directing support towards new builds could strengthen demand and give builders more confidence to start projects. In The Telegraph's reporting, a Home Builders Federation spokesman said weak demand was constraining construction.
What remains uncertain — and what happens next?
The government says full terms, costs and implementation timelines will be set out at next month's Budget. Number 10 expects pre-registration by the end of 2026, but the scheme has been announced, not launched.
The Sunday Mirror reports that John Healey is expected to provide further details at the Budget and that the scheme would be funded by reprioritising existing government budgets; these specific details come from press reporting, not the government press release. Further official documents should clarify:
the exact pre-registration process, full application and operational launch dates;
the household-income and local property-price cap levels, any deposit limits and the exact first-time-buyer definition;
which new builds, developers and mortgage lenders participate;
the detailed equity-loan terms, including the interest-free period's duration, later charges, repayment and resale rules;
how affordability and mortgage borrowing are assessed alongside the equity loan; and
whether further buyer protections apply if property values fall.
Developers will be expected to contribute to scheme costs; the Sunday Mirror additionally reports a fee linked to property values, a detail not confirmed in the government press release.
Sources and status
GOV.UK, 26 September 2026: new first-time buyer scheme to be confirmed at Budget — official announcement of the England new-build scheme, expected 2.5% deposit and 20% government-backed equity loan, initial interest-free period and developer contribution; cap levels, costs and implementation timings remain forthcoming.
Number 10 announcement on X, 26 September 2026 — says the scheme is aimed at buyers without family deposit support and pre-registration is set to open by the end of the year; this is not a full application launch.
Sunday Mirror, 26 September 2026 — secondary reporting on the developer fee linked to property values, John Healey and budget reprioritisation; those details should not be mistaken for published government rules.
The Telegraph, Camilla Turner, 26 September 2026 — reporting on new-build demand and the housing-supply rationale, including the Home Builders Federation spokesman's comments; not evidence of scheme outcomes.
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