Your First Home Scheme Confirmed: What Does the Autumn Budget 2026 Mean for First-Time Buyers?

TL;DR

What Did the Autumn Budget 2026 Announce for First-Time Buyers?

In the recent Budget 2026 document, Chancellor John Healey confirmed £4.7 billion in funding for the Your First Home scheme. The government expects this move to help 70,000 households successfully step onto the property ladder.

If you are a first-time buyer, you will want to note three main announcements. First, we now have full details on the Your First Home scheme, a fresh equity loan scheme designed for new-build homes. Second is the launch of the First Time Buyer ISA. This new savings account includes a helpful government bonus and completely replaces the Lifetime ISA for new savers. Third, there is a lower Lifetime ISA withdrawal charge for buyers purchasing a home that costs more than £450,000.

Finally, Stamp duty thresholds were not changed. This means your current first-time buyer relief stays exactly as it is.

How Does the Your First Home Scheme Work?

You simply put down a deposit of at least 2.5%, the government lends you 20% of the purchase price, and you take out a mortgage for the rest. With a 2.5% deposit, your mortgage naturally covers the remaining 77.5%

According to Which?, your deposit can actually reach up to 15% of the purchase price.

Financial Reporter notes that developers who sign up to the scheme must also contribute. This works on a sliding scale designed to protect smaller developments.

Many commentators have compared this to the former Help to Buy equity loan, which successfully helped many first-time buyers onto the ladder while it was available.

Who Can Apply?

• First-time buyers only.
• Homes in England only. The scheme is not available in Scotland, Wales or Northern Ireland.
• New-build homes only, bought from a developer signed up to the scheme.
• Households earning up to £110,000 a year outside London.
• Households earning up to £140,000 a year in London.

What Are the Price Caps?

Price caps are based on median house prices in each local authority area, so the limit depends on where you buy.

The cap is up to £650,000 in inner London and up to £500,000 in outer London. Elsewhere in England, a local cap applies based on the area’s median price.

When Can You Apply?

Pre-registration is set to open by the end of December 2026, with full applications following shortly after in February 2027. You can then expect the first equity loans to be paid out from April 2027.

Essentially, this means that if you are planning to use the scheme, you will need to wait until 2027 to officially complete your purchase with it.

How Much Will You Repay on A Your First Home Equity Loan If Your Home’s Value Rises?

When it comes time to settle up, you actually pay back a percentage of your home’s current value, rather than the exact amount you originally borrowed. Honestly, this is one of the most crucial details you need to grasp before using the scheme.

Let us look at a quick example. Imagine you buy a new-build home for £500,000. Your 20% government equity loan would initially be £100,000. However, if your property is worth £600,000 when you are ready to repay, you will owe 20% of that new £600,000 valuation, which comes to £120,000. In this scenario, that is £20,000 more than what was originally lent to you.

On the flip side, if your home’s value happens to fall before you repay, the amount you owe might also be lower, because it stays tied to that exact same percentage. As Sarah Bush, the head of residential at Cheffins, recently highlighted to Financial Reporter, this equity contribution is very much a loan rather than a free gift.

Finally, keep in mind that the loan is interest-free for the first five years. After those five years pass, an interest rate kicks in and gradually rises, so it is incredibly important to factor this into your long-term budget.

What Is the New First Time Buyer ISA?

The First Time Buyer ISA is a great new savings account that gives a 25% government bonus on the money you save for a first home. Starting in April 2029, it officially replaces the Lifetime ISA for new savers.

You are allowed to save up to £4,000 a year, and the government adds a 25% bonus. This means that a full £4,000 saving will attract a £1,000 bonus. The total bonus is capped at £20,000 and gets paid directly on your balance when you withdraw it to buy a first home costing up to £450,000.

Unlike the Lifetime ISA, which you must open before your 40th birthday, this new option has no upper age limit. You also avoid any withdrawal charge if your home costs more than £450,000, although the bonus itself will not apply in that scenario.

According to Which?, providers will stop offering new Lifetime ISAs from April 2029. However, any accounts opened before that date can safely continue under the current rules.

What Has Changed for Lifetime ISA Holders?

From 29 October 2026, the penalty for using a Lifetime ISA to buy a home above £450,000 falls from 25% to 20%.

• This applies where the other qualifying rules are met.
• The charge for other unauthorised withdrawals stays at 25%.
• The change may help buyers in higher-priced areas, where homes can exceed the £450,000 limit.

If you hold a Lifetime ISA and expect your purchase price to be close to £450,000, it is worth checking how the rules apply to you before you commit to a property.

What Other Low-Deposit Mortgages Are Available Now?

Keep in mind that the Your First Home scheme is strictly limited to new-build homes. However, some lenders already offer excellent low-deposit mortgages that you can use on other properties. At the time of writing, these include:

Skipton Building Society Track Record mortgage (0% deposit)

• A 100% mortgage, so no deposit is needed.
• You must have paid your rent in full and on time for 12 months in a row within the last 18 months.
• Applicants must be aged 21 or over and a first-time buyer, or not have owned a property in the last three years.
• Borrowing is limited to £600,000, and the scheme is not available in Northern Ireland.

Lloyds and Halifax £5,000 deposit mortgage

• A minimum deposit of £5,000, with borrowing up to 98% of the purchase price.
• For homes priced up to £300,000.
• Not available for new-build or shared ownership purchases.
• Gifted deposits are not accepted.

Santander My First Mortgage (£10,000 deposit, 2% minimum)

• A minimum deposit of £10,000, with borrowing up to 98% of the purchase price.
• Loans from £190,001 to £500,000.
• For first-time buyers only, and both applicants must be first-time buyers on a joint mortgage.
• Not available for flats, new-build homes or properties in Northern Ireland.

Lender criteria and products can change or be withdrawn at short notice. Our guide to no deposit mortgages explains these options in more detail.

Your First Home vs Lender Low-Deposit Mortgages: A Quick Comparison

How Can You Improve Your Chances of Approval for a Low-Deposit Mortgage?

Lenders are commonly cautious with low-deposit lending, as a smaller deposit means more risk for them. Whichever route you choose, these steps may help:

• Check your credit file: make sure your details are accurate and correct any errors before you apply.
• Keep up with payments: missed or late payments on credit cards, loans or phone contracts can affect your application.
• Pay your rent on time: some lenders, including Skipton, use your rental payment history as part of their assessment.
• Review your bank statements: lenders commonly check recent statements, and high spending on lifestyle costs or expensive hobbies may affect how much they are willing to lend.
• Limit new credit: applying for new credit shortly before a mortgage application may lead to additional credit searches on your file.

You can get an early idea of what you may be able to borrow with our mortgage affordability calculator.

Should You Choose Your First Home or A Lender Scheme?

There is no single right answer, as it depends on your circumstances, where you want to live and the type of home you want to buy.

Points to consider include:

• Your First Home is limited to new-build homes, which can sometimes cost more than similar older homes in the same area.
• Lender schemes can be used on many existing homes, which may widen your choice.
• Your First Home includes a 20% equity loan, which may increase how much you can spend, but it must be repaid based on your home’s future value.
• Lender schemes are available now, while Your First Home loans are not expected until April 2027.
• Each route has different costs, so comparing the total cost over time gives a clearer picture than the deposit alone.

Richard Donnell, executive director at Zoopla, told Financial Reporter he expects the scheme to have around half the impact of the old Help to Buy scheme.

If you are looking for other routes onto the property ladder, we highly recommend visiting our first-time buyer mortgages and reading our detailed guide to using family support to buy your first home.

How WIS Mortgages Can Help

Our advisers are fully CeMAP-qualified, and we work closely with both high-street and specialist lenders, including those offering excellent low-deposit mortgages. We are ready to help you compare the Your First Home scheme with current lender options, explain the costs of each, and properly prepare your application.

Rest assured, any broker fee or commission we might receive from a lender will be fully explained and agreed with you in writing before your application is submitted.

If you would like to find out which route best suits your plans, simply call us on 020 3011 1986 or contact us today to speak to a friendly mortgage adviser.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Frequently Asked Questions

Is the Your First Home scheme open now?

Not yet. Pre-registration opens by the end of December 2026, full applications from February 2027, and the first equity loans are expected from April 2027.

Is the Your First Home equity loan interest-free?

Yes, for the first five years. After that, a rate applies and gradually rises.

How much will I repay on a Your First Home equity loan?

You repay the same percentage of your home’s value at the time of repayment. On a 20% loan, if your home is worth £600,000 when you repay, you would repay £120,000.

Can I use Your First Home to buy an older property?

No. The scheme is only for new-build homes bought from developers signed up to the scheme.

Is Your First Home available in Scotland or Wales?

No. The scheme applies to homes in England only.

What is the income limit for Your First Home?

Household income must be no more than £110,000 outside London, or £140,000 in London.

When does the First Time Buyer ISA start?

April 2029. It will replace the Lifetime ISA for new savers from that date.

Is there an age limit on the First Time Buyer ISA?

No. Unlike the Lifetime ISA, the First Time Buyer ISA has no upper age limit.

What has changed for Lifetime ISA holders buying above £450,000?

From 29 October 2026, the withdrawal charge for buying a home above £450,000 falls from 25% to 20%, where the other qualifying rules are met.

Can I get a mortgage with no deposit in 2026?

Possibly. Skipton Building Society’s Track Record mortgage lends up to 100% to eligible renters with 12 months of on-time rent payments, subject to its criteria.

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Information checked on 28 October 2026.

Scheme details are based on the Autumn Budget 2026 announcement and may be updated as further guidance is published.

Lender products and criteria can change or be withdrawn at any time.

Mortgage availability and lending criteria can change.

All applications are subject to status, affordability, property suitability and lender criteria.

This article is provided for informational and educational purposes only and does not constitute personal financial, legal, or tax advice. Mortgage criteria and rates are subject to individual circumstances and lender terms.

WIS Mortgages is a trading name of WIS Contractor Mortgages Limited, which is authorised and regulated by the Financial Conduct Authority (FCA number 824411). We are a credit broker, not a lender.