Saving for your first home is a big commitment. When you’re putting money aside each month, the deposit you need can still feel a long way off. A scheme that reduces that initial hurdle could make a real difference, but understanding how it works is just as important as knowing how much you need to save.
Labour’s proposed Your First Home scheme is designed to help more first-time buyers into homeownership. The government announced the outline on 26 September 2026, with further details due at the Budget.
So, what could it mean for your first purchase?
How would Your First Home work?
Under the proposed Your First Home scheme, eligible first-time buyers would only need to save a 2.5% deposit, with a government backed equity loan covering a further 20% of the purchase price. The scheme would apply to new-build homes bought from developers taking part.
The equity loan would be interest-free for an initial period, helping to ease costs as you settle into your new home. A household income cap and local property price limits are also planned to help direct support towards buyers who need it most.
How much would you need to save?
If you were buying an eligible home for £300,000, the proposed structure could look like this:
| Part of the purchase | Percentage | Amount |
|---|---|---|
| Your deposit | 2.5% | £7,500 |
| Government-backed equity loan | 20% | £60,000 |
| Mortgage | 77.5% | £232,500 |
| Total purchase price | 100% | £300,000 |
These are example calculations based on the announced percentages, rather than a government example. They assume the scheme proceeds on that basis and that you and the property qualify.
For comparison, a 5% deposit on the same property would be £15,000. The proposed deposit would therefore reduce the initial savings needed by £7,500. That is a significant difference, but it is worth looking at the whole financial commitment alongside the upfront savings.
What does an equity loan mean for you?
With an equity loan, the amount you repay is usually based on a percentage of what your home is worth at the time. If your home’s value goes up, you could pay back more than you borrowed.
The repayment rules for Your First Home haven’t been confirmed yet. Before you commit, make sure you understand how much you’ll need to repay, how it’s worked out and when it’s due.
Who would be eligible to use the Your First Home scheme?
The scheme is intended for first-time buyers purchasing a new-build home in England from a developer taking part. You would also need to meet a household income limit, and the property would need to fall within the price cap for your area. These limits and the full eligibility rules are still to be confirmed at the Budget.
Which details are we still waiting for?
Several details are still to be confirmed, including when the scheme will launch and how to apply. We’re also waiting to hear how long the interest-free period will last, what interest or fees will apply afterwards, the rules for buying with someone else and whether you can use a Lifetime ISA alongside the scheme.
Looking ahead to your first home
A smaller deposit could bring homeownership within reach sooner. The next step is to see how the final rules fit your circumstances, your budget and the home you want to buy.
When those details arrive, take time to ask questions and understand the full commitment. Buying your first home is exciting, and clear advice can help you approach it with confidence.
