What is the Your First Home scheme?
Your First Home is a new government scheme designed to help eligible first-time buyers get onto the property ladder with a smaller deposit and a lower mortgage. It is aimed at people who may be able to afford monthly mortgage payments but are struggling to save enough for a traditional deposit.
The scheme is expected to open for applications in February 2027, with the first property sales planned for April 2027. It will apply to eligible new-build homes in England purchased from developers taking part in the scheme.
For first-time buyers in Nottingham, this could provide another route to homeownership, particularly if saving a large deposit has been the biggest obstacle. However, there are eligibility rules, property price limits and longer-term costs to consider before deciding whether it is right for you.
How does the First-Time Buyer Scheme 2027 work?
The Your First Home scheme allows eligible buyers to fund a property purchase using three parts:
- A cash deposit of at least 2.5% of the purchase price.
- A government equity loan worth 20% of the purchase price.
- A repayment mortgage from a participating lender to cover the remaining 77.5%.
This means you would need to save a smaller deposit than you would typically need for a standard 95% mortgage. You would also need to borrow less through your mortgage because the government equity loan covers part of the purchase price.
For example, if you were buying an eligible new-build home for £300,000, the purchase could be funded as follows:
- Your deposit: £7,500.
- Government equity loan: £60,000.
- Your mortgage: £232,500.
Without the scheme, a buyer purchasing the same property with a standard 95% mortgage would typically need a £15,000 deposit and a £285,000 mortgage.
The scheme could therefore reduce the initial deposit by £7,500 in this example, while also reducing the mortgage required. You would still need to pass the lender’s affordability and credit checks, and you would need to cover other costs associated with buying a home.
Who is eligible for the 2027 First-Time Buyer Scheme?
Your First Home is designed for first-time buyers who need help purchasing a new-build property. Under the government’s published guidance, the main requirements include:
- You must be a first-time buyer.
- You must buy an eligible new-build property in England from a participating developer.
- The property must be within the relevant local authority price cap.
- You must use the property as your main home.
- Your total annual household income must be £110,000 or less outside London, or £140,000 or less in London.
- You must be able to obtain a repayment mortgage from a participating lender.
These are the main requirements set out in the published guidance. The full eligibility rules and application details should be checked against the latest official information before you make financial commitments.
Can you use the scheme to buy a home in Nottingham?
The scheme will apply to eligible new-build properties in England, so Nottingham buyers may be able to use it if they meet the requirements and find a suitable property from a participating developer.
However, there will be local property price caps. These are intended to keep the scheme focused on homes within an appropriate price range for each area. The full list of local authority price caps for every area, including Nottingham, should be checked once officially published.
This means you should not assume that every new-build home in Nottingham will qualify. The property’s location, purchase price and developer participation will all matter.
If you are considering buying in Nottingham, it is worth starting to look at the types of homes available and the areas that suit your budget. You can also explore our guide to property investment in Nottingham if you are researching the local property market, although the Your First Home scheme is intended for buyers purchasing their own main residence rather than buy-to-let investors.
How much deposit do you need?
The minimum deposit under Your First Home is 2.5% of the property’s purchase price. The amount you need to save will therefore depend on the price of the home you want to buy.
- £150,000 property: £3,750 deposit.
- £200,000 property: £5,000 deposit.
- £250,000 property: £6,250 deposit.
- £300,000 property: £7,500 deposit.
These examples show the deposit at 2.5% of each property price. They do not mean that homes at these prices will automatically qualify, as local price caps and other eligibility requirements will apply.
Remember that your deposit is only one part of the cost of buying a property. You should also budget for legal fees, a survey, mortgage fees where applicable, moving costs and any other expenses involved in the purchase.
How does the government equity loan work?
The government equity loan covers 20% of the property’s purchase price. It will be interest-free for the first five years. Under the published schedule, interest will then apply as follows:
- Years 1 to 5: no interest.
- Year 6: interest at 1.5%.
- From year 7: interest at 3%.
These interest payments are separate from your mortgage payments and do not reduce the amount you owe on the equity loan.
It is also important to understand that the loan is linked to the value of your property. If you buy a home for £300,000 and take a £60,000 equity loan, the loan represents 20% of the original purchase price.
If the property is later valued at £320,000, repaying 20% of its value would mean repaying £64,000. If it is valued at £280,000, the equivalent amount would be £56,000. The amount you repay can therefore rise or fall with the property’s value, subject to the scheme’s repayment rules.
The equity loan is intended to be repaid when you sell the property, and the scheme guidance allows for early repayment. The detailed repayment requirements, valuation process and any fees should be checked in the final scheme guidance before you commit.
Will your monthly mortgage payments be lower?
Because the government equity loan covers part of the purchase price, the mortgage you need could be smaller than it would be with a standard 95% mortgage. This could reduce your monthly mortgage payments, although the amount you save will depend on the property price, mortgage rate and lender’s terms.
The government’s illustrative example uses a £300,000 property and a 30-year repayment mortgage at a 5% interest rate. In that example, the mortgage payment under Your First Home is approximately £1,248 a month during the first five years, compared with around £1,530 for a standard 95% mortgage.
The equity loan is interest-free during those first five years. In the government example, the total monthly cost rises to approximately £1,323 in year six and £1,398 from year seven as interest becomes payable on the equity loan.
These figures are illustrative rather than a mortgage offer. Your actual payments will depend on your circumstances and the mortgage product available to you. They also exclude other homeownership costs such as council tax, insurance, maintenance and any service or estate charges.
When does the First-Time Buyer Scheme launch?
The government’s published timetable sets out the following expected milestones:
- By the end of December 2026: customer pre-registration and further guidance are expected to be available.
- February 2027: the scheme is expected to open for customer applications.
- April 2027: the first property sales under the scheme are expected to take place.
Applications are not yet open. Pre-registration is expected to help prospective buyers find out more about eligibility and the price cap for their area, without committing them to a purchase.
The government has also announced £4.7 billion of funding for the scheme over five years. This is intended to support the programme over its planned period, but it does not mean every buyer or property will automatically qualify.
If you are hoping to buy your first home in 2027, you can use the time before launch to review your finances, check your credit report, work out what monthly payments you could afford and research the areas where you would like to live.
What should first-time buyers do now?
You do not need to wait until applications open to start preparing for a property purchase. Getting organised now could help you understand your options and move more confidently when suitable homes become available.
- Work out your budget. Consider your deposit, likely mortgage payments and the additional costs of buying and maintaining a home.
- Review your credit history. Mortgage lenders will assess your credit profile as part of their application process.
- Understand your borrowing options. The scheme will not guarantee mortgage approval, so it is worth finding out what you may be able to borrow.
- Research new-build properties. Check which developments may suit your needs and look out for announcements about participating developers.
- Keep up to date with the rules. Local property price caps, lender participation and the full application process will need to be confirmed before you apply.
It is also sensible to consider what would happen if mortgage rates increased or your circumstances changed. Although a smaller deposit could make buying more accessible, you should still be comfortable with the longer-term costs of owning the property and the eventual repayment of the equity loan.
Is the First-Time Buyer Scheme right for you?
Your First Home could offer a useful option for people who have a regular income but have found it difficult to save a large deposit. The combination of a 2.5% deposit and a 20% government equity loan could make some eligible new-build homes more accessible.
However, it will not be suitable for everyone. You will need to meet the scheme’s requirements, find an eligible property within the local price cap and secure a mortgage. You should also consider the interest charges that begin after five years and how changes in your property’s value could affect the amount you eventually repay.
It is worth comparing the scheme with other routes to homeownership, including standard mortgages with different deposit requirements. The right option will depend on your savings, income, circumstances and the homes available in your preferred area.
Looking to buy your first home in Nottingham?
If you are planning to buy in Nottingham, understanding the local property market can help you narrow down the areas and types of homes that fit your budget. The Your First Home scheme may provide another option in 2027, but the final local price caps and participating developments will be important.
Benwell Daykin estate agents can help you explore the Nottingham property market and understand what is available. If you are also researching the local rental market, you can find out more about our letting agent services in Nottingham.
For more information about buying or selling a property, contact Benwell Daykin and speak to our team.
Information in this guide is based on government guidance published in October 2026. Scheme requirements, local property price caps and application details may be updated before launch. Always check the latest official guidance before making a purchase decision.
Read the official Your First Home scheme guidance on GOV.UK.