First Home Fund for first-time buyers

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First-time buyers

The first-time buyers market in Scotland has increased by more than 90% compared to a decade ago, but being able to make that first move onto the property ladder remains a challenge.

With that in mind, the Scottish Government has introduced a new shared equity scheme explicitly aimed at helping first-time buyers.
The First Home Fund offers up to £25,000 towards the purchase of both new build and existing properties to all first-time buyers.
To qualify, you must not have previously owned a property in Scotland or anywhere else and you will be required to have a minimum deposit of 5% of the purchase price on a mortgage that must be a least 25% of the purchase price.

While the Scottish Government will have shared equity of your property, you are still the outright owners of the property. Repayment of the equity share will only be paid back to the Scottish Government when you sell your home, you will not be asked for any monthly payments toward this, and no interest charges will be made by the Scottish Government.

Who can apply

Anyone who is a first-time buyer in Scotland and is taking out a mortgage will be eligible to apply for the scheme. If you are paying in cash or have previously owned a home either in Scotland or anywhere else in the world, including joint ownership or sole owner, you will not qualify for this scheme.

There are however some requirements you should be aware of –

The Scottish Governments maximum contribution is £25,000 or 49% of the purchase price or valuation figure, whichever is lower. If the price of your home is less than the valuation figure on that property, then the maximum Scottish Government contribution will be £25,000 or 49% of the purchase price.

Shared Equity explained

If you have never considered shared equity before and are not entirely clear on what it means, here is an explanation.

Shared equity means that the cost of your properties purchase price is split with the Scottish Government. Your share will be through a mortgage and deposit, with the remaining stock provided by the Scottish Government.

You will be required to pay this back on the sale of your property, but at any time you can increase your equity share. The Scottish Government will not charge any monthly or interest payments.


Your deposit and mortgage will cover 85% of the home’s value when purchased, and the Scottish Government will hold 15% share on your property. When you sell your home you will receive 85% of the selling price and the other 15% will be paid to the Scottish Government.
However, you have ownership of your home and have the full title.

With 50% of first-time buyers accounting for all property purchases with a mortgage in Scotland, there remains a demand for owning your home, therefore, with the help of the new First Home Fund that desire can be a step closer.

Speak to a sales advisor for more information on how to apply for this new Scottish Government scheme.