14 Feb 2020

Frequently Asked Questions about the First Home Fund

Frequently Asked Questions about the First Home Fund

Last year Scotland's First Minister announced a new £150 million national scheme, the First Home Fund, to help new buyers north of the border get on to the property ladder.

The scheme will give at least 6,000 people up to £25,000 towards the cost of buying a home.

How does it work?

The Scottish Government will take an equity share in the property, but there are no monthly payments to be made to the Scottish Government and no interest charged.

The homeowner will normally repay the Scottish Government when they sell the property, but can choose to pay the money off earlier.


How much money are first-time buyers entitled to from the scheme?

The scheme will lend eligible buyers up to £25,000.

The Scottish Government equity share cannot exceed 49% and your mortgage must be at least 25% of the purchase price. 

Do the buyers still need to contribute a deposit payment?

Yes, the new buyers need to provide a minimum deposit of around 5% (subject to the individual lender requirement). 

Can buyers use money from a Help to Buy ISA or Lifetime ISA alongside the First Home Fund?

Yes, buyers are able to use the money saved in a Help to Buy: ISA or Lifetime ISA towards their deposit.

What happens when it comes to selling the property?

Buyers are required to repay the loan when selling the property. The amount repaid is dependent upon the equity share held by each party. 

For example, if the homeowner sells their home for £140,000 and holds an 80% share, they will pay £28,000 to the Scottish Government to cover its 20% equity share. This applies irrespective of whether it was purchased above or below valuation or in the event of the property decreasing in value.

What's the first step?

The Scottish Government is recommending any interested parties should seek independent mortgage advice in the first instance to determine if the scheme is right for them. 

Aberdein Considine's independent advisers are specialists in helping first-time buyers with their first mortgage. Click here to get in touch with the team today.

Finding your first home

To give north east house-hunters a helping hand finding their first home, we've collated five ideal starter homes all new to the market this week.

Click here to take a look.

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