First-Time Buyer Mortgages and Government Schemes
Last Updated: October 25, 2026
Quick Summary
Government schemes for first-time buyer mortgages reduce the deposit you need or the price you pay, through loan guarantees, equity loans or discounted homes. Guarantee schemes back part of the mortgage so lenders offer 95% LTV deals, while equity loan and discount schemes lend you money or sell you a home below market value.
- The Mortgage Guarantee Scheme is live and extended to 30 June 2027 across all four nations.
- First Homes sells new-build homes at a 30% to 50% discount that stays with the property.
- The old Help to Buy equity loan scheme in England is closed to new applicants.
- First Homes and Help to Buy Wales apply to new-build homes only.
- Check the scheme price cap for your area before you offer on a property.
Table of Contents
- How Government Schemes Help First-Time Buyer Mortgages
- Which Schemes Are Available for First-Time Buyers
- First Homes Scheme Eligibility and Qualifying Criteria
- Help to Buy Wales: What Buyers Should Know
- First-Time Buyer Mortgage Affordability and Deposit Requirements
- How to Apply for a First-Time Buyer Scheme
- Risks and Exit Scenarios to Weigh Up Before You Commit
- Getting Independent Advice on Your First Purchase
- Frequently Asked Questions
How Government Schemes Help First-Time Buyer Mortgages
Government schemes for first-time buyer mortgages cut the deposit you need or the price you pay, through loan guarantees, equity loans or discounted homes.
The schemes do not replace a mortgage. You still borrow from a lender and repay it; what changes is the risk the lender takes on, or the price you pay for the home.
There are two main types:
- Guarantee schemes – the government backs part of the mortgage so lenders feel safer
- Equity loan and discount schemes – the government lends you money or sells you a home below market value
Each scheme has its own rules, and some have closed to new applicants.
Which Schemes Are Available for First-Time Buyers
Availability has changed a lot in recent years: some schemes are live, some are closed to new applicants, and some run only in certain nations.
| Scheme | Status (October 2026) | Mechanism | Best For | Nation |
|---|---|---|---|---|
| Mortgage Guarantee Scheme | Live, extended to 30 June 2027 | Government guarantees a portion of the mortgage, so lenders offer 95% LTV deals | Buyers with a 5% deposit | England, Wales, Scotland, Northern Ireland |
| First Homes | Live, England only | New-build home sold at a 30%-50% discount that stays with the property | Local first-time buyers on lower incomes | England |
| Shared Ownership | Live, all nations (rules differ) | Part-buy, part-rent; you buy a share and pay rent on the rest | Buyers who cannot afford a full mortgage | England, Wales, Scotland, Northern Ireland |
| Help to Buy Wales | Live, Wales only | Shared equity loan of up to 20% of the purchase price | Buyers in Wales | Wales |
| Help to Buy equity loan (England) | Closed to new applicants | Legacy scheme; existing borrowers still repaying | Existing borrowers only | England |
The Mortgage Guarantee Scheme has supported more than 53,000 mortgage completions since launch, according to HomeOwners Alliance, First Time Buyer Schemes 2026.
The old Help to Buy equity loan scheme in England is closed to new applicants. Wales still runs its own version, covered below.
Property price caps to check before you view
Each scheme caps the price of an eligible home, set by the scheme and sometimes by the local council. Confirm the current cap for your area before you offer, because a home above it will not qualify.
- First Homes – the discounted price must sit within the local authority’s cap, which is set locally and reviewed periodically.
- Help to Buy Wales – a national price cap applies to eligible new-build homes; confirm the current figure with the scheme provider.
- Shared Ownership – caps vary by nation and by scheme provider; some new-build developments have their own limits.
New-build restrictions
First Homes and Help to Buy Wales apply to new-build homes only. Shared Ownership is often new-build but can include resales of existing shared-ownership homes. The Mortgage Guarantee Scheme is not restricted to new-build, making it the most flexible for buyers who want an older property.
If you are weighing up schemes, start with the one that matches your deposit and the type of property you want, then check the price cap and nation rules. A scheme that looks generous on paper can be ruled out by a cap or a new-build restriction.
What each scheme costs you over time
The headline discount or guarantee is only part of the picture; ongoing costs differ sharply:
- Mortgage Guarantee Scheme – you repay the mortgage in the normal way; the guarantee sits behind the lender, not in front of you, so there is no separate government loan to repay.
- First Homes – you own 100% of the discounted home, but the discount stays with the property, so your gain on resale is limited to the discounted value.
- Shared Ownership – you pay rent on the share you do not own, plus service charges; rent can rise annually under the lease terms.
That difference matters when you compare monthly outgoings. A shared-ownership home with a small mortgage can still carry a rent bill that rivals a full mortgage payment, and an interest-free equity loan will not stay that way. A guaranteed 95% mortgage has no ongoing government charge, but the rate is usually higher than a 90% deal.
Scheme status and caps change. The table above reflects October 2026 and should be re-checked against the scheme provider or your local council before you apply.
First Homes Scheme Eligibility and Qualifying Criteria
First Homes sells new-build homes to first-time buyers at a discount that stays with the home on resale.
You may be able to buy a home for 30% to 50% below market value, according to the GOV.UK First Homes scheme guide.
To qualify, you generally need to meet these criteria:
- You are a first-time buyer
- Your household income is below the local cap
- You have a local connection to the area
Local councils set some of the rules. Income caps and local connection tests vary by area.
The discount is the big draw: a lower purchase price means a smaller deposit, a smaller mortgage and lower monthly payments.
Watch out: the discount is tied to the property, not to you.
Help to Buy Wales: What Buyers Should Know
Help to Buy Wales is a shared equity scheme. The Welsh Government lends you part of the purchase price through an equity loan.
You still need a mortgage for the rest. The equity loan is interest-free for a set period, then interest charges begin (Buy your dream home with Help to Buy – Wales).
Key points to check:
- The scheme applies to new-build homes
- There are price caps on eligible properties
- You need a deposit and a mortgage offer
Because this scheme runs in Wales only, the rules differ from the rest of the market. Confirm current terms before you apply.
First-Time Buyer Mortgage Affordability and Deposit Requirements
Affordability is the real test, not just the deposit.
A 5% deposit opens up more options than it used to. Government-backed guarantees encourage lenders to offer these deals.
Use this simple check before you apply:
- Add up your monthly income after tax
- List all regular outgoings, including debts
- Subtract bills and living costs
Most lenders cap borrowing at a multiple of your income and stress-test payments against higher rates.
A common mistake is stretching to the maximum. Leave room for rate changes and everyday costs.
How to Apply for a First-Time Buyer Scheme
Applying follows a clear path, but the route differs: First Homes goes through the local council, Help to Buy Wales through the scheme provider, and the Mortgage Guarantee Scheme is simply a mortgage application with a participating lender.
The application journey, step by step
- Check your eligibility against the specific scheme – confirm the scheme is open, you meet the criteria, and the property you want sits within the price cap. Do this before anything else.
- Get a decision in principle – a lender confirms in writing what it may lend. This is not a full offer, but it tells sellers and scheme providers you are serious.
- Find a qualifying home – check the property meets the scheme rules, the price cap, and any new-build restriction. For First Homes, confirm the home is being sold under the scheme.
- Submit the scheme application – through the council for First Homes, through the provider for Help to Buy Wales, or through the lender for the Mortgage Guarantee Scheme. Each route has its own form and evidence requirements.
- Complete the full mortgage application – with income, ID, and deposit evidence. The lender will run affordability and credit checks.
- Instruct a solicitor and arrange conveyancing – the solicitor checks the scheme conditions, any charges on the property, and the legal title.
- Exchange and complete – you get the keys once the legal transfer and any scheme paperwork are finalised.
Documents you will usually need
The exact list depends on the scheme and the lender, but most applications ask for:
- Proof of income – payslips for employed buyers, accounts or tax returns for self-employed buyers
- Bank statements covering the last few months
- Photo ID and proof of address
Gather the documents before you apply. Missing paperwork is the most common reason an application stalls, and a stalled application can cost you a property in a competitive market.
How long each route takes
Timelines vary, but a common pattern is:
- Mortgage Guarantee Scheme – a standard mortgage timeline, often a few weeks from application to offer, depending on the lender and the property.
- First Homes – add time for the council’s eligibility check and local connection verification before the mortgage application can complete.
- Help to Buy Wales – the provider’s approval usually needs to be in place before the mortgage completes, so the two processes run in parallel.
Where applications go wrong
Most problems fall into a few patterns: buyers apply before checking the price cap and find the home does not qualify, assume a decision in principle is a full offer, forget a gifted deposit needs a letter from the giver, or miss the local connection evidence for First Homes.
If you are unsure where to start, no-obligation independent mortgage advice can help before you view a property or make an offer. A broker who knows the scheme rules can tell you which route fits and which documents to prepare first.
Risks and Exit Scenarios to Weigh Up Before You Commit
Every scheme has a catch most guides gloss over: know the exit before you enter.
- Equity loans – you repay a share of the home’s value, so if prices rise, so does what you owe
- Interest charges – equity loans can start charging interest after an initial period
- Resale limits – discounted homes stay discounted, which caps your gain
Conveyancing matters here too: a solicitor checks the scheme conditions and any charges on the property. For free Conveyancing Advice, see Cornerstone Mortgages Limited.
Protection is the other half of the plan. If your income stopped, how would you pay the mortgage? For free Insurance Advice, see Cornerstone Mortgages Limited.
Getting Independent Advice on Your First Purchase
Schemes change, and lenders differ. Independent advice saves you from guessing.
A whole-of-market mortgage broker compares deals across lenders, not just one panel. That matters when your deposit is small or your credit history is not perfect.
Fees are worth checking up front. See Mortgage Broker Fees to understand what a broker may charge.
At Cornerstone Mortgages Limited, we offer no-obligation independent mortgage advice by phone, video call or email, matching you with deals based on your circumstances and walking you through each step.
Frequently Asked Questions
What government schemes can help first-time buyers buy a home?
Several government-backed routes exist, including the First Homes scheme, which lets eligible first-time buyers purchase a new-build home at a discount of 30% to 50% below market value, and the Mortgage Guarantee Scheme, which has supported more than 53,000 mortgage completions according to the HomeOwners Alliance. Shared ownership and shared equity products are also offered by housing associations and lenders. Availability varies by nation and scheme, so check the official GOV.UK guidance and confirm current status before you rely on any one route.
Who qualifies for the First Homes scheme?
First Homes eligibility centres on being a first-time buyer, meeting local income and connection criteria set by the council, and buying a participating new-build property that will be your only or main residence. Discounts run from 30% to 50% below market value. Because each local authority sets its own priority rules and price caps, the qualifying buyer profile differs from area to area. Ask the selling developer or your local council for the specific criteria before you reserve.
How does Help to Buy Wales work?
Help to Buy Wales is a devolved scheme, separate from schemes in England, and it has been subject to change and closure, so confirm its current status on the official Welsh government pages before you plan around it. Where available, it has operated as a shared equity loan supporting new-build purchases with a smaller deposit. A mortgage adviser can confirm whether any equivalent support is open to you and how it affects affordability and repayment.
Can you get a mortgage through a first-time buyer government scheme?
Yes. Scheme support sits alongside a normal mortgage, not instead of one. You still apply to a lender, pass affordability and credit checks, and provide a deposit, though the scheme may reduce how much you need to borrow or the deposit required. Lenders vary in which schemes they accept, which is why whole-of-market advice helps. A broker can match you to lenders familiar with the specific scheme and explain the interest charges and repayment terms attached to any equity loan.
Getting a first mortgage is easier when you know which schemes are open and how lenders assess you. Cornerstone Mortgages Limited offers independent, whole-of-market advice, a one-on-one service with a qualified adviser, and remote support by phone, video call or email. Get started with Cornerstone Mortgages Limited and find the right first-time buyer mortgage for your circumstances.
