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Your First Home scheme explained: the Burnham government's 2.5% deposit plan for first-time buyers

UKCalc News Desk · Event 26 September 2026 · Published 6 October 2026

The answer

Not yet available. Your First Home is a planned equity-loan scheme for first-time buyers of new-build homes in England, expected to support 2.5% deposits with a 20% government-backed equity loan. Caps, start date and full terms are due at the Budget on 28 October 2026.

What happened

On 26 September 2026 the Ministry of Housing, Communities and Local Government announced Your First Home, a new equity-loan scheme for first-time buyers in England. The government is led by Prime Minister Andy Burnham. The scheme is to be confirmed at the Budget on 28 October 2026. On new-build homes from participating developers, it is expected to support a 2.5% deposit backed by a 20% government-backed equity loan, with an initial interest-free period. There will be a household income cap and local property price caps, which have not yet been set.

Source fact

On Saturday 26 September 2026 the government announced a new equity loan scheme, Your First Home, in England. It said the scheme will be confirmed at the Budget.

GOV.UK (Ministry of Housing, Communities and Local Government) — New first-time buyer scheme to be confirmed at Budget, 26 September 2026

Source fact

MHCLG says the scheme is expected to support 2.5% deposits, backed by 20% government-backed equity loans. It is for first-time buyers buying a new-build property from a developer signed up to the scheme.

GOV.UK (Ministry of Housing, Communities and Local Government) — New first-time buyer scheme to be confirmed at Budget, 26 September 2026

Source fact

The equity loans are to have an initial interest-free period. The government says those using the scheme could save hundreds of pounds a month compared with a 95% mortgage. The length of the interest-free period has not been stated.

GOV.UK (Ministry of Housing, Communities and Local Government) — New first-time buyer scheme to be confirmed at Budget, 26 September 2026

Source fact

There will be a household income cap and local property price caps. The detail will be set out at the Budget. Developers are expected to contribute when they sign up.

GOV.UK (Ministry of Housing, Communities and Local Government) — New first-time buyer scheme to be confirmed at Budget, 26 September 2026

Source fact

MHCLG says further details, including costs and implementation timelines, will be announced by the Chancellor at the Budget.

GOV.UK (Ministry of Housing, Communities and Local Government) — New first-time buyer scheme to be confirmed at Budget, 26 September 2026

Source fact

HM Treasury has confirmed that the Budget will be held on 28 October 2026.

GOV.UK (HM Treasury) — Chancellor letter to the Treasury Select Committee (TSC) - Budget 2026 date, 31 July 2026

Source fact

The scheme was announced by the government led by Prime Minister Andy Burnham, in office since 20 July 2026.

GOV.UK — Prime Minister

Source fact

Your First Home is separate from the existing First Homes scheme. That scheme sells eligible homes in England at 30% to 50% below market value to first-time buyers earning no more than £80,000 (£90,000 in London).

GOV.UK — First Homes scheme: first-time buyer's guide

Source fact

Help to Buy: Equity Loan is closed to new applications in England. Under it, borrowers paid no interest on the equity loan for the first five years, then 1.75% in the sixth year. Your First Home's own terms have not been published.

GOV.UK — Help to Buy: Equity Loan

Source fact

In England and Northern Ireland, an eligible first-time buyer pays no Stamp Duty Land Tax on the first £300,000 of a home costing up to £500,000.

GOV.UK (HM Revenue & Customs) — Stamp Duty Land Tax: residential property rates

What is established, and what is not

What we know
  • What it is: a government equity-loan scheme called Your First Home, announced by MHCLG on 26 September 2026.
  • Status: announced. It is due to be confirmed at the Budget on 28 October 2026 and is not open to applications.
  • Where: England only, according to the announcement.
  • Who: first-time buyers buying a new-build home from a developer signed up to the scheme.
  • Deposit: the scheme is expected to support a 2.5% deposit, alongside a 20% government-backed equity loan.
  • Cost: the equity loan is to have an initial interest-free period.
What we are checking
  • The household income cap and the local property price caps.
  • How long the interest-free period lasts, and what is charged after it.
  • How and when the equity loan is repaid.
  • When the scheme opens, and which developers and lenders take part.
  • Whether the mortgage covers the remaining 77.5%, as UKCalc assumes in its worked example.
  • The scheme's cost and how developers' contributions will work.

Nothing in the right-hand column is established. It is listed so that what is confirmed cannot be read as covering it.

What it means

For a first-time buyer, the scheme would cut both the deposit needed and the mortgage, by adding a government equity loan. On UKCalc's illustrative £250,000 new-build, that means £6,250 down, a £50,000 equity loan and a £193,750 mortgage. With a conventional 95% mortgage it would be £12,500 down and a £237,500 mortgage. The equity loan is still borrowing: it has to be repaid, and its costs after the interest-free period are not yet known. You would still need to pass a lender's affordability checks on the mortgage, pay legal and moving costs, and budget for Stamp Duty above the first-time buyer nil band. It is not a version of the existing First Homes scheme, which sells homes at a discount, and it is not the closed Help to Buy scheme, although the equity-loan design is similar.

Who is affected

Key numbers

Every figure below is a UKCalc calculation from the stated inputs, not a figure published by any source.

UKCalc calculation

On an illustrative £250,000 new-build, the announced proportions mean a £6,250 deposit, a £50,000 equity loan and a £193,750 mortgage (77.5% of the price).

UKCalc calculation — see How a £250,000 new-build would be split under the announced proportions for inputs and assumptions.

UKCalc calculation

The same home bought with a conventional 5% deposit needs £12,500 down and a £237,500 mortgage.

UKCalc calculation — see The same home with a conventional 5% deposit and 95% mortgage for inputs and assumptions.

UKCalc calculation

So the scheme would halve the deposit (£6,250 less) and cut the mortgage by £43,750, but it adds a £50,000 equity loan that still has to be repaid.

UKCalc calculation — see The difference between the two routes at £250,000 for inputs and assumptions.

UKCalc calculation

An eligible first-time buyer would pay no Stamp Duty on a £250,000 home, with or without the scheme.

UKCalc calculation — see Stamp Duty for an eligible first-time buyer at £250,000 (England and Northern Ireland) for inputs and assumptions.

What UKCalc calculated

How a £250,000 new-build would be split under the announced proportions

£6,250 deposit + £50,000 equity loan + £193,750 mortgage

Method
Purchase price × 2.5% (deposit), × 20% (equity loan) and × 77.5% (the remainder, assumed to be the mortgage).
Inputs
  • illustrative price £250,000
  • deposit 2.5% (MHCLG, expected)
  • equity loan 20% (MHCLG, expected)
Assumptions
  • The 2.5% deposit and 20% equity loan are the proportions MHCLG says the scheme is 'expected to support'. The final terms will be set out at the Budget on 28 October 2026.
  • £250,000 is an illustrative price, not a figure from the announcement. Local property price caps have not been published, so a £250,000 new-build may or may not be eligible.
  • Assumes the remaining 77.5% is funded by a repayment mortgage, as it was under Help to Buy: Equity Loan. The announcement does not state the mortgage share.
Check it
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The same home with a conventional 5% deposit and 95% mortgage

£12,500 deposit + £237,500 mortgage

Method
Purchase price × 5% (deposit) and × 95% (mortgage).
Inputs
  • illustrative price £250,000
  • deposit 5%
  • mortgage 95% loan-to-value
Assumptions
  • £250,000 is illustrative. Whether a 95% mortgage is available, and at what rate, depends on the lender and the borrower.
Check it
Run this yourself

The difference between the two routes at £250,000

£6,250 less deposit and a mortgage £43,750 smaller, with a £50,000 equity loan on top

Method
£12,500 − £6,250 for the deposit; £237,500 − £193,750 for the mortgage.
Inputs
  • the two calculations above
Assumptions
  • The 2.5% deposit and 20% equity loan are the proportions MHCLG says the scheme is 'expected to support'. The final terms will be set out at the Budget on 28 October 2026.
  • £250,000 is an illustrative price, not a figure from the announcement. Local property price caps have not been published, so a £250,000 new-build may or may not be eligible.
  • Assumes the remaining 77.5% is funded by a repayment mortgage, as it was under Help to Buy: Equity Loan. The announcement does not state the mortgage share.
  • The equity loan is still borrowing. How and when it is repaid, and the charges after the interest-free period, have not been announced.

Stamp Duty for an eligible first-time buyer at £250,000 (England and Northern Ireland)

£0

Method
First-time buyer relief: no SDLT on the first £300,000 of a purchase of up to £500,000. £250,000 falls entirely within the nil band.
Inputs
  • price £250,000
  • first-time buyer nil band £300,000
  • relief available up to £500,000 (HMRC, 2026/27)
Assumptions
  • Assumes the buyer qualifies for first-time buyer relief. The announcement says nothing about Stamp Duty, and SDLT rules are unchanged by it.
Check it
Run this yourself

Assumptions and scope

Change any of these and the result changes. They are stated so the figure can be checked rather than taken on trust. How UKCalc produces its figures: methodology.

UKCalc's interpretation

The section below is UKCalc's analysis. It is separated from the facts above deliberately: it is arguable, and the facts are not.

UKCalc interpretation

The scheme lowers the cash needed upfront and the size of the mortgage. It does not make the home cheaper. A buyer would owe the equity loan as well as the mortgage. Until the repayment terms and the charges after the interest-free period are published, the full cost cannot be calculated.

UKCalc's reading of the evidence above, not a statement by any source.

UKCalc interpretation

Nobody can apply yet, and eligibility turns on caps that have not been published. The practical step now is to work out what you could afford both with a 5% deposit and with a 2.5% deposit plus an equity loan, then check against the caps when the Budget publishes them.

UKCalc's reading of the evidence above, not a statement by any source.

What happens next

The Chancellor is due to set out the details at the Budget on 28 October 2026: the income cap, the local price caps, costs and timelines. UKCalc will update this article when official details are published. Each change will be recorded in the dated updates section below, so what was known on each date stays visible. Until then the scheme is not open, and no lender or developer has been officially named as taking part.

Questions this answers

Sources

Statutory figures belong to the body that publishes them. UKCalc compiles and verifies them, and any calculation built on top is UKCalc's own — see the governed rates reference.

UKCalc mortgage affordability calculatorSee what a lender might lend on your income, with a 5% deposit or a smaller one.UKCalc mortgage calculatorCompare monthly repayments on a £193,750 mortgage and a £237,500 one, or on your own figures.UKCalc stamp duty calculatorCheck whether first-time buyer relief covers the price you are looking at.UKCalc take-home pay calculatorStart a mortgage budget from what you actually take home each month.UKCalc first-time buyer guideEvery route onto the ladder side by side: Lifetime ISA, Shared Ownership, First Homes and now Your First Home.High loan-to-value mortgages in 2026: what a smaller deposit costsThe cost of borrowing more against a small deposit, the trade-off this scheme is meant to change.
For journalists and editorial partners. The UKCalc News Desk can supply the underlying figures, model a different scenario, or explain the mechanics on the record. How to work with us.

Reported by the UKCalc News Desk. Statutory inputs are taken from UKCalc’s verified rates reference for the 2026/27 tax year; the calculations and interpretation are UKCalc’s own. Published by Animateed Limited. About · Editorial policy · Methodology · News Desk