Helping First-Time Buyers Bridge the Gaps
Buying your first home in Ireland can be exciting, but financial hurdles may stand in your way. The First Home Scheme (FHS) helps bridge the funding gap between your savings, mortgage, and the cost of a new build, making home ownership possible for more people through a shared equity approach.
What Is the First Home Scheme?
The First Home Scheme is a government-backed shared equity scheme designed to support first-time buyers and certain other eligible applicants. It provides up to 30% of the purchase price of a newly built home or 20% if you're also using the Help to Buy scheme.
In exchange for its contribution, the scheme has a share in your property equal to the percentage it contributed. This means the scheme owns a portion of your home. You can purchase this share back, either all at once or in parts, whenever you choose.
Who Is Eligible?
You may qualify for the First Home Scheme if you meet the following criteria:
- First-time buyer or ‘fresh start’ applicant (e.g. divorced or previously insolvent with no interest in a former home).
- Over 18 and legally resident in Ireland.
- Buying a newly built home in a private development or building your own home.
- The property price is within the local authority price cap.
- Mortgage approval from a participating lender (e.g. AIB, Bank of Ireland, PTSB).
- Minimum 10% deposit (can include Help to Buy funds or site equity for self-builds).
How Does It Work?
Let’s break it down with a few examples:
Example 1: Buying a New Home Without Help to Buy
- Property price: €380,000
- Joint salary: €70,000
- Maximum mortgage (4x salary): €280,000
- Deposit (10%): €38,000
- Shortfall: €62,000
- FHS contribution: €62,000 (16.32% equity share)
Example 2: Buying a New Home With Help to Buy
- Property price: €450,000
- Joint salary: €87,500
- Maximum mortgage: €350,000
- Deposit (HTB + savings): €45,000
- Shortfall: €55,000
- FHS contribution: €55,000 (12.22% equity share)
Example 3: Self-Build
- Site value: €100,000
- Build cost: €300,000
- Total value: €400,000
- FHS contribution: €30,000 (10% equity share)
- Future valuation: €500,000
- Redemption amount: €37,500 (10% of €375,000 after site value discount)
Repaying the Equity Share
You can repay the equity share:
- Anytime after 6 months of ownership.
- In lump sums or partial payments (minimum 5% of original equity).
- Based on the current market value of your home.
If your home increases in value, the amount you owe will increase as well. For example:
- Original equity: 10% of €300,000 = €30,000
- New value: €350,000
- Redemption amount: 10% of €350,000 = €35,000
Service Charges
There are no charges for the first five years. Starting from the sixth year, you pay a service charge:
- Years 6–15: 1.75% annually
- Years 16–29: 2.15% annually
- Years 30+: 2.85% annually
You can pay service charges monthly or annually. If needed, you may also defer payments.
When Must You Repay the Equity?
You must repay the equity share if:
- You sell your home.
- You rent out the property (unless renting a room while living there).
- You switch mortgage provider to a non-participating lender.
How to Apply
- First, check your eligibility using the available online calculator.
- Secure mortgage approval from a participating lender.
- Apply online for a Preliminary Certificate.
- Choose your property and finalise your mortgage.
- Receive your Eligibility Certificate.
- Submit documents and complete the purchase with your solicitor.
Final Thoughts
The First Home Scheme bridges the gap many first-time buyers face between their available funds and the full cost of a new or self-built home. It offers a clear, practical way for eligible applicants to overcome financial barriers to home ownership in a challenging market.
Whether you're buying a new build or it is a self-build property, it is essential to understand how the scheme operates and how its equity share may affect you later. Always get independent financial and legal advice before you apply.
