First Home Fund

A handy guide to the Scottish Government’s First Home Fund, available to first time home buyers.

If you're buying your first home, the First Home Fund can help. It's a new Scottish Government shared equity scheme that aims to help those buying a house for the first time get on the property ladder.

What is a Shared Equity Scheme?

Shared equity means the purchasing cost is split between yourself and, in this case, the Scottish Government's First Home Fund. You will however own the property outright. 

What do you need?

• 5% deposit
• An agreed mortgage in principle of at least 25%

What can the First Home Fund offer?

The maximum First Home Fund contribution from the government towards a Springfield home is £25,000

Example A 

The valuation/purchase price             £150,000
Your deposit and mortgage total        £125,000
Your equity share                                83.4%
Scottish Government contribution     £25,000
Scottish Government equity               16.6%

Example B 

The valuation/purchase price             £250,000
Your deposit and mortgage total        £225,000
Your equity share                                90%
Scottish Government contribution     £25,000
Scottish Government equity               10%

When do I repay this? 

 When you sell the home. If you want to, you can increase your equity share over time with percentage payments at current market value. Say for example, you want to increase your equity share by the minimum 5%. If your home was valued at £150,000 when you bought it, but its current market value is £180,000 you pay 5% of £180,000. 

How much do I pay back when I sell the house? 

Again, you pay back the equivalent percentage. For example, if the Scottish Government committed 16.6% of the purchase value, you pay back 16.6% of the resale value. 

Is the first home fund right for me?

When deciding if you want to use the First Home Fund, it's important to consider the other options available. There is another government scheme called Help to Buy (Scotland) which you may be eligible for, available on homes up to the value of £200,000.  If the home you want to buy is between £167,000 and £200,000, Help to Buy can give you more than the maximum £25,000 available through the First Home Fund. Find out more about Help to Buy here.

What is the difference between First Home Fund and Help to Buy (Scotland)?

Both schemes aim to help home buyers get on the property ladder, but there are a few differences between the two schemes:

  • Help to Buy is available to anyone who does not currently own their own home, whereas First Home Fund is only available to someone buying their first home.
  • Help to Buy is only available on new build homes. First Home Fund can be used to buy both new and resale properties.
  • Help to Buy gives you 15% of your deposit as an interest free equity loan. First Home Fund gives you up to £25,000 towards your home as part of a shared equity scheme.

Find more information on the Help to Buy scheme here.

What else should I know?

  • All Springfield homes are eligible, there are no restrictions on the price of property you can buy.
  • Your mortgage must be capital repayment. This means it can't be interest only.
  • The home cannot be used as a let property.
  • You cannot use with another equity scheme such as Help to Buy (Scotland). You can however still use a Help to Buy ISA or Lifetime ISA.
  • If you are making a joint application to the First Home Fund, only one of you needs to be a first time buyer.
  • The Government have allocated £200m for this scheme for homes completed by 31st March 2021.

This information has been put together as a guide only. We recommend speaking to an independent financial adviser or a mortgage adviser as every mortgage lender will have their own requirements.

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