Things to know about the First Home Scheme, Ireland

Things to know about the First Home Scheme, Ireland

What is the First Home Scheme in Ireland?

The First Home Scheme in Ireland is designed to make it easier for individuals to purchase a new home, by increasing their access to affordable housing options. It gives people the chance to own their own homes and helps them take that important first step towards financial security. Through the FHS, the government and several banks can co-fund up to 30% of your new house's cost. Yet, you have complete autonomy over the stake they acquire in your home since you can repurchase it anytime you want or choose not to.

The FHS scheme is a wonderful opportunity for those wanting to get on the property ladder - first-time buyers as well as some other qualifying individuals. You don't have to worry about your income level it's not taken into consideration.

What are the eligibility criteria for First Home Scheme?

Meet the below criteria for qualifying for the First Home Scheme.

To qualify as a first-time buyer or 'fresh start' applicant, you must be at least 18 years of age and have legal residence in Ireland.

You are called a first-time buyer if:

  • This is a first-time venture for you, in terms of buying or constructing a property to live in.

  • There is no ownership or stake in any real estate property either in Ireland or overseas.

To be eligible as a first-time buyer, you must not have had any past ownership of a property in another country or been an inheritor of one.

You are called a ‘fresh start‘ applicant if you are no longer attached financially to a property owned before because:

  • Your relationship has come to an end and you are now officially divorced or single.

  • You have been through a period of personal insolvency or bankruptcy.

To be eligible for the first-time buyer or fresh start scheme, your partner on the mortgage must also qualify as a first-time buyer or fresh start applicant. You must purchase a new home in a private development. Homes that are second-hand or self-build do not qualify for this program.

It is essential to stay within the set price limit of your locality when purchasing a home.

When buying a new home, you must stay within the price limit set by your local authority. These limits differ based on where the property is located and what type of property you're looking to buy. These limits are connected to median prices for first-time buyers in respective areas. The limits were reviewed in December 2022 and increased from January 1, 2023. They are reviewed regularly and changed if necessary. See the price limits for each area below:

Local authority area Price limits
Cork City, Dublin City, Dún Laoghaire-Rathdown, Fingal, South Dublin €475,000 for houses and €500,000 for apartments
Galway City €425,000 for houses and €450,000 for apartments
Limerick City and County €375,000 for houses and €450,000 for apartments
Waterford City and County €350,000 for houses and €450,000 for apartments
Co Wicklow €475,000 for all properties
Co Cork, Co Kildare €425,000 for all properties
Co Galway, Co Kilkenny, Co Louth, Co Meath, Co Westmeath €375,000 for all properties
Co Laois €350,000 for all properties
Co Carlow, Co Cavan, Co Clare, Co Donegal, Co Kerry, Co Leitrim, Co Longford €325,000 for all properties
Co Mayo, Co Monaghan, Co Offaly, Co Roscommon, Co Sligo, Co Tipperary, Co Wexford €325,000 for all properties
Note: Duplex homes come within the specified house price range.


This plan can be availed by those who are purchasing properties to live as their primary residence. It is essential that the property solely acts as your home and no other.

You must obtain your mortgage from a participating lender in order to be eligible.

Only specific lenders are valid under the scheme - Bank of Ireland, Permanent TSB, AIB, Haven Mortgages and EBS. You must make sure that your mortgage is with one of these if you want to be eligible.

Whenever opting for a mortgage loan, it's important to make the most of your borrowing capacity. As per Central Bank regulations, first-time buyers can borrow up to 4 times their gross annual income while non-first-time buyers are eligible for a maximum of 3.5 times their gross annual income.

Should you be getting an MPE from a participating lender, then you won't qualify for the First-Time Homebuyer's Scheme (FHS). This is when your lending provider allows you to take a loan above the Central Bank Limits. Banks still have the flexibility to pursue this course of action for a certain percentage of mortgages.

To purchase the property, you need to pay a minimum of 10% down as a deposit.

To find out if you meet the criteria for the First Home Scheme, use the eligibility calculator available on their website. This will provide you with all the pertinent information.

What is the maximum sum of funds we are provided with, and what are the expenses that we need to bear?

The First Home Scheme is a fantastic opportunity for those seeking to buy their first home. It works by offering financial assistance in exchange for a stake in the property - this will then revert to you when you are able to buy it back. Consequently, you'll eventually own the house outright and enjoy all of the benefits that come with it.

With the First Home Scheme, you could be eligible to receive up to 30% of the value of your new home. If Help to Buy is also used, this reduces to 20%. The least you can get is 2.5% of the purchase price or €10,000 - whichever number is higher.

What are the charges?

For the initial 5 years since the purchase of your home through the First Home Scheme, there's no such thing as a service charge. After 6 years have gone by, however, a fee will be imposed. This is to cover the cost and upkeep of the First Home Scheme itself. It is a percentage of the amount the FHS paid when you purchased the home. The service charge amounts to an increase the longer you remain in the scheme. They are:

  • For 6 to 15 years: 1.75%

  • For 16 to 29 years: 2.15%

  • For 30 years and over: 2.85%

These rates are fixed.

You have a few options when it comes to paying the service charge - either pay them in one lump sum or spread them out into monthly instalments. If you're facing financial difficulties, we offer reduced amounts, payment pauses and deferrals to help ease the burden. Deferring the service charge does not cost anything upfront but it needs to be paid eventually. This could be for various reasons like repaying equity share, selling the house or if you pass away.

How to buy back the equity share in the home?

You have the option to redeem your equity stake in your home whenever you need it. However, you are not obligated to do so.

You have the option to buy back your full equity share in one go or do partial payments at a minimum rate of 5% twice a year. It's up to you how you want to repay the original equity amount.

Your equity share in your home is a percentage of the market value. If property prices go up, the amount you have to pay back will be higher due to the increase in value. Let's say you purchased a property worth €300,000 in 2022 and the FHS provided equity of €30,000 (10%). If you wish to buy back that share by 2025 when the property has increased in value to €350,000, then you would have to pay 10% of that amount i.e., €35,000.

What is the procedure to buy back the equity share?

In order to purchase some or all of the FHS equity share, you must have your home valued. The valuation must be done by an FHS Approved Valuer and you'll need to pay for it. To view a list of the approved valuer, please refer to the FHS customer portal. This valuation is valid for up to 12 months.

This valuation report needs to be sent to FHS and a 'redemption quote' needs to be requested in order to find out the cost of either settling some or all of the FHS equity connected with your property. When settling the redemption fee, this will be determined based on the value of your property. Necessary paperwork should be supplied in accompaniment. Visit the First Home Scheme page for details about the documents required for completion.

What if you don’t find the valuation correct?

If you disagree with the FHS's initial valuation of your home, you can contact them for a second opinion. If that doesn't work out for you, then they will provide an independent assessment whose final value is binding.

What if I revamp the home and add more value?

When assessing the market value of your property, any changes or improvements that are made to it will not be taken into consideration. For instance, if you add an extension to the house, this won't be included in the valuation despite potentially increasing its worth.

Can we see the home or rent?

If you are looking to either sell or rent out your home, you must ensure that you have taken care of the FHS equity share and all the associated service charges before doing so. If you're no longer using the house as your primary residence, you have to repay the equity share. But if you want to rent out a room in your home while keeping it as your primary residence, then you can stay in the scheme.

Can we switch the mortgage provider?

If you're looking to switch your mortgage provider, you don't need to pay off the equity share if they are part of the same scheme. However, if the new provider isn't in the same scheme, then you'll need to pay both the equity share and any relevant charges.

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