£25,000 available to first-time buyers | moneyfacts.co.uk

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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 23/12/2019

The First Home Fund is a pilot scheme set up by the Scottish Government to help make buying a first home in Scotland more affordable for first-time buyers. The scheme is open until March 2021 or until the £150m budget has been used.  

In 2018 there were 34,519 first-time buyers in Scotland, this new scheme will be available to an estimated 6000 buyers, that’s about 17% of the first-time buyer population.

How does the First Home Fund work?

The First Home Fund offers first-time buyers in Scotland up to £25,000 towards the purchase price of a property. This means the Scottish Government owns a share in the property, called an ‘equity share’. First-time buyers will need at least 5% as their deposit and take a mortgage of at least 25% of the purchase price to qualify. Here is an example:



Equity share

Purchase price of property



5% deposit


See below

First-time buyer mortgage


See below

Total contribution from first-time buyer



Scottish Government equity share




Reacting to the new scheme, Paul Denton, Chief Executive Officer of Scottish Building Society, said: “We are delighted and proud to be one of the first lenders to offer this new scheme.

He continued: “This new funding scheme offers a greater degree of flexibility to first time buyers and allows them to benefit from the lower interest rates available on lower ‘loan to value’ mortgages. Compared to other funding schemes, there are no limits on the property value and the government contribution could be as high as 49% allowing for more people to purchase their first home.”

Some key facts about the First Home Fund

  1. Only repayment mortgages are allowed on the scheme
  2. It is available for existing as well as new build properties
  3. There is no means testing to qualify
  4. Applicants outgoings must not exceed 45% of their net income after they have paid their mortgage
  5. Joint applications are allowed but only for one maximum award of £25,000 and only one applicant needs to be a first-time buyer
  6. Applicants cannot use any other shared equity scheme offered by the Scottish Government such as (Help to Buy (Scotland) Affordable New Build, Help to Buy (Scotland) Smaller Developer, Open Market Shared Equity or New Supply Shared Equity schemes)
  7. There is no deadline to buy back the Scottish Government’s equity share and no interest is added to this amount
  8. Users of the scheme can buy back equity from the Scottish Government in increments of 5% of the property’s value (this is the property value at the time of the buy back)

How much is available from the First Home Fund?

First-time buyers can claim up to £25,000 under the scheme, and this must not be more than 49% of the property’s value. Buyers can choose to use a smaller amount and thereby reduce the Government’s equity share in the property.

Which banks offer mortgages for the First Home Fund?

  • Bank of Scotland
  • Barclays
  • Glasgow Credit Union
  • Halifax
  • Leeds Building Society
  • Nationwide
  • Scottish Building Society
  • Scotwest Credit Union
  • TSB

How much does it cost to apply for the First Home Fund?

The administering agent of the scheme (currently Link Homes subject to a tender process to be carried out) will charge a fee of £550 upon award. If the fee is not paid, then the funds from the Scottish Government will not be released.

What are the deadlines for the First Time Home Fund?

Buyers will need to have conducted their missives for the house purchase within three months of receiving their notification of award. After the missives are concluded buyers then have a maximum of six months to complete their purchase. If buyers miss these deadlines then their award will be cancelled.

How do first-time buyers apply for the First Home Fund?

First-time time house buyers can apply at https://linkhousing.org.uk/firsthomefund.

Moneyfacts.co.uk has written a guide about buying and selling property in Scotland.


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