The First Home Scheme (FHS) is an affordable housing initiative launched in July 2022 to help people purchase their first home. The scheme operates on a shared equity model, whereby the Government and mortgage lenders contribute up to 30% of the property’s value in exchange for a stake in it.
The scheme is available to first-time buyers with mortgages through participating lenders including AIB, Permanent TSB, and Bank of Ireland.
What is an Equity Share?
The First Home Scheme uses an equity share model. A participating mortgage provider buys a stake in your property on your behalf. Depending on your preference, this stake can be temporary or permanent.
For example, if the FHS provides 15% of the equity needed to purchase your home, it will retain 15% ownership of that property until it is sold or you choose to buy it back.
It’s important to understand that equity interest is a percentage, not a fixed amount — meaning the sum owed will rise or fall in line with the property’s value.
How Can I Pay it Back?
In most circumstances, the equity can be repaid either as a lump sum or in affordable instalments. There are certain situations, however, where full repayment becomes immediately required — we cover those further below.
Who Qualifies for the First Home Scheme?
The FHS is primarily aimed at first-time buyers purchasing a home on a new development who need additional support beyond their mortgage and deposit.
A second group is also eligible under the Government’s Fresh Start Principle — people who are divorced, separated, or who have undergone insolvency proceedings and have no remaining capital in their former home.
To check your eligibility, visit the First Home Scheme eligibility calculator.
Other eligibility criteria
- You must be a first-time buyer or qualify under the Fresh Start Principle
- You must be aged 18 or over with the right to live in Ireland
- You must not have previously purchased or built a property to live in
- You must not hold any financial interest in any property in Ireland or abroad
How Much Funding Can I Get, and Are There Any Costs?
For the first five years, the First Home Scheme is free of charge. If you have not bought out the FHS equity share by year six, a service charge will apply.
Like the equity stake itself, service charges are based on a percentage rather than a fixed amount:
| Period | Service Charge |
|---|---|
| Years 6–15 | 1.75% |
| Years 15–30 | 2.15% |
| 30+ Years | 2.85% |
These rates are fixed. The service charge can be paid annually or in monthly instalments. If you cannot afford the full charge, there are options to pay a reduced amount, pause payments, or defer them.
Can I Buy Back the Equity Share?
Yes. You can buy back the equity in your home at any time, either as a lump sum or in affordable instalments. If you repay before year six, no service charge will apply.
What is the Process for Buying Back the Equity Share?
To buy back your equity, your home must first be valued by an approved FHS Valuer. A list of accredited valuers is available on the FHS portal. An FHS valuation is valid for 12 months.
Once you have your approved valuation, submit it to the FHS. They will then issue a Redemption Quote, which sets out exactly what needs to be repaid and the options available to you.
What Does Percentage Ownership Mean in Practice?
Eligible buyers receive funds from the FHS in return for the FHS taking an equity share in the property. Here’s an example:
- Property purchase price: €450,000
- FHS equity share: €45,000 (10%)
- FHS ownership: 10% — regardless of whether the property value rises or falls
When you fully redeem the equity share, you own your property outright at 100%.
When Must I Pay Off the Equity Share?
There are specific situations where full repayment of the FHS equity is required:
Selling or renting your home — if you sell or rent out your property, you are legally obligated to repay the FHS equity along with any outstanding service charge. Your home must remain your primary residence. Note that renting out a single room is permitted, provided the property remains your primary home.
Changing mortgage provider — switching to another FHS-approved lender does not require repayment. However, moving your mortgage to a provider outside the scheme means you must repay in full.
Death — in the event of the homeowner’s passing, the FHS equity must be repaid in full.
How Do I Apply for the First Home Scheme?
Applications are made online at firsthomescheme.ie. If you need assistance completing the form, the FHS team can help directly.
The application process, step by step:
- Check eligibility — use the FHS eligibility calculator
- Get mortgage approval — secure approval from an FHS-participating lender
- Apply online — provide personal details, property information, and your solicitor’s details, along with mortgage approval proof, photo ID, and proof of address (dated within the last 180 days)
- Application assessment — the FHS reviews your application and supporting documents
- Receive your eligibility certificate — if approved, you’ll receive a certificate estimating the equity available to you; share this with your mortgage lender
- Secure full mortgage approval — from one of the FHS-approved lenders
- Upload your letter of offer — via the FHS customer portal
- Sign your FHS customer contract — a legal agreement between you and the FHS, signed by you and witnessed by your solicitor
- Receive your FHS funds — your solicitor submits the signed contract; once approved, the FHS transfers funds to your solicitor’s account and the purchase completes
FAQs
I previously bought a home outside of Ireland. Am I eligible? No. The scheme applies to first-time buyers only. Previous property ownership abroad disqualifies you from the FHS.
When do I have to pay back the equity stake? Repayment is largely at your discretion — you can repay in a lump sum or instalments. Full repayment is required if you sell, rent out, or transfer the property, or in the event of death.
What will my mortgage repayments be? Repayments are based solely on the amount borrowed from your lender, not the FHS contribution. However, a service charge on the FHS portion will apply after five years unless repaid.
Will I be charged interest on the Government’s contribution? No — there is no interest charge. A service fee applies from year six onwards. See the charges table above for details.
Is there an income limit? No. There is no income limit on the First Home Scheme.
Contact the First Home Scheme
First Home Scheme Block C, Maynooth Business Campus, Maynooth, Co. Kildare, W23 F854 Tel: 0818 275 662 Email: info@firsthomescheme.ie Website: firsthomescheme.ie
Thinking of Buying Your First Home?
At Earnest.ie, we work with first-time buyers every day and understand how complex the journey can be. Whether you have questions about the First Home Scheme or need guidance on finding the right property, our team is here to help.
Contact Earnest.ie today for a free consultation.