Free guide

Your First Home calculator

See how the government's 20% equity loan changes your deposit, mortgage and monthly payment, including what happens when interest starts in year 6. Tested against GOV.UK's own example.

Rates checked 3 November 2026 Checked by Daniil Shumko, editor

£
Must be at or under your council's price cap, for example £315,000 in Birmingham or £355,000 in Manchester.
At least 2.5%, at most 15%.
%
years

Monthly payment, years 1 to 5

£1,248

That's £282 a month less than buying with a 5% deposit and no loan (£1,530).

Your deposit£7,500
Government equity loan (20%)£60,000
Your mortgage£232,500
Year 6 (1.5% loan interest)£1,323
From year 7 (3% loan interest)£1,398

The loan interest doesn't reduce what you owe. When you sell or pay it off, you repay 20% of the home's value at that time: if it's worth 10% more (£330,000) you repay £66,000; if it's worth 10% less (£270,000) you repay £54,000.

Announced, not open yet. Pre-registration is due by the end of December 2026 and the first loans from April 2027. The details could change before then, and we'll update this page if they do.

GOV.UK's worked example

On a £300,000 new build, over 30 years at an assumed 5% rate:

Your First HomeStandard 5% deposit
Deposit£7,500£15,000
Equity loan£60,000none
Mortgage£232,500£285,000
Monthly, years 1 to 5£1,248£1,530
Monthly, year 6£1,323£1,530
Monthly, from year 7£1,398£1,530

The small print people miss

  • New builds only, in England, from developers and lenders taking part.
  • Price caps follow local median prices: Liverpool £235,000, Sheffield £260,000, Leeds £305,000, Bristol £325,000, Barnet £500,000.
  • You repay a share of the value, not the amount borrowed. If prices rise, so does what you owe.
  • The interest from year 6 doesn't pay the loan down. Plan for when and how you'd repay it.
  • The OBR expects the scheme "could marginally raise house prices".

Common questions

What is the Your First Home scheme?

A government scheme for first-time buyers of new-build homes in England, announced in Budget 2026. You put down at least 2.5%, the government lends 20% of the price as an equity loan, and a repayment mortgage covers the rest. The loan is interest free for five years.

When does Your First Home open?

The government says it will open for pre-registration by the end of December 2026, with full applications from February 2027 and the first loans issued from April 2027. Pre-registering doesn't commit you to buying through the scheme.

Who can use Your First Home?

First-time buyers in England buying a new-build home from a participating developer, with household income of £110,000 or less outside London or £140,000 or less in London. The price must be within your local authority's cap, for example £315,000 in Birmingham, £355,000 in Manchester or £650,000 in Westminster.

How much do I repay?

You repay the loan's share of the home's value when you sell or pay it off, not the amount you borrowed. On a 20% loan, a home worth £320,000 means repaying £64,000; worth £280,000, £56,000.

Is the equity loan really interest free?

For five years. Interest is 1.5% of the loan in year 6 and 3% from year 7. On a £60,000 loan that's £75 a month in year 6 and £150 a month from year 7, and it doesn't reduce what you owe.

Sources

  1. GOV.UK: Your First Home
  2. GOV.UK: Your First Home local authority property price caps
  3. GOV.UK: Budget 2026

This calculator gives a general figure, not tax, legal or financial advice. Where the government publishes worked examples, we test it against them. Found a problem? Tell us.