The First Home Scheme Ireland 2022 allows first time buyers to borrow up to 30% of the value of their property directly from the government.
There’s zero interest for the first 5 years, 1.75% up to 15 years, 2.15% up to 29 years and 2.85% after that.
By using the scheme to boost your deposit you can bring down how much mortgage you need making it easier to get a foot on the property ladder.
In this article, I will be going into detail about how the First Home Scheme Ireland 2022 works, what you have to do to qualify, how much can be available to you and finally how to apply.
1. How does the First Home Scheme Ireland 2022 work?
The First Home Scheme Ireland 2022 is an equity scheme, while the Help to Buy Scheme is a tax refund scheme.
It allows first time buyers purchasing newly built homes to receive from 2.5% up to 30% of their property value as a deposit to help reduce the mortgage amount needed.
In return the Irish Government retains a share of ownership of your home.
When you sell your home the government will get a share of the sale price depending on how much share they took.
- Home purchased @ €300,000
- First Home Scheme Deposit @ 30% = €90,000
- Home sold @ €400,000
- Government owed 30% = €120,000
The government also has the right to interest payments on the amount advanced after 5 years, first at 1.75% then rising to 2.15% after 15 years and 2.85% after 29 years.
So for a typical mortgage of 20 years
- 10 years €90,000 @ 1.75%
- 10 years €90,000 @ 2.15%
- Total additional interest of €18,760
So in the example above the government would ultimately receive €138,760 for the €90,000 you receive under the First Home Scheme.
There is a catch 22 here as the interest payments will be taken into account by the lenders when they look at your affordability so it’s likely that taking the scheme will reduce the amount of mortgage you will be able to get.
Given spiralling house prices and the Central Bank of Ireland’s 3.5 salary cap on lenders, this may still be the only option many have however to escape being trapped by rising rents.
2. How do I know if I qualify for the First Home Scheme Ireland 2022?
The First Home Scheme Ireland 2022 is targeted at First Time Buyers who can’t get a large enough mortgage to afford to buy a new home.
It aims to bridge the gap between how much money you need and how much money the lender will give you.
For that reason the First Home Scheme requires you to have a mortgage of at least 70% of the properties value to qualify. If you can afford to take out a smaller loan, then by definition you don’t need the scheme.
The First Home Scheme Ireland 2022 is available to all First Time Buyers purchasing a newly built property under €500,000 in Dublin or Cork and down to €250,000 in some parts of the country.
|Local Authority Area||House Price Ceilings*||Apartment Price Ceilings|
|Cork City, Dublin City, Dún Laoghaire-Rathdown, Fingal, South Dublin||€450,000||€500,000|
|Limerick City and CountyWaterford City and County||€350,000||€450,000|
*For the purposes of the First Home Scheme, duplexes fall within house price ceilings.
|Local Authority Area||Price Ceilings (all properties)|
|Cork, County Galway, County Kilkenny, County Meath, County Westmeath,||€350,000|
|Clare, County Kerry, County Laois, County Louth, County Mayo, County Monaghan, County Offaly, County Roscommon, County Wexford||€300,000|
|Carlow, County Cavan, County Donegal, County Leitrim, County Longford, County Sligo, County Tipperary,||€250,000|
A First Time Buyer is anyone who hasn’t previously taken purchased a property in or outside of Ireland.
Due to the governments ‘fresh start’ policy the scheme is also available to anyone who has been made bankrupt or is divorced and no longer has a share of a property.
In order to qualify, you must-
- Be a first time buyer both in Ireland and outside of Ireland
- Be moving in with an applicant who is also a first time buyer if more than one person will be purchasing the home
- Be moving into a newly built home in a private development
- Be using the property as your principal private residence for 5 years
3. How much is available to me from the First Home Scheme Ireland 2022?
Under the First Home Scheme Ireland 2022, first time buyers can claim,
- Up to 30% of the purchase price of their new home, for example a home worth €200,000 can claim €60,000
- If you avail of the Help to Buy Scheme however the First Home Scheme is capped at 20%
As the Help to Buy Scheme is a grant it is not subject to being reclaimed or to future interest payments.
This means that a combination of funding the purchase through a 10% Help to Buy Scheme grant and a 20% First Home Scheme equity option is the best approach for most cases.
The scheme is not means tested so is available for all income levels.
4. How can I apply to the First Home Scheme Ireland 2022?
If you think you qualify for the First Home Scheme Ireland 2022, then you should talk to a mortgage broker who can advise you on the best approach and which lenders work with the scheme.
The government have indicated that they will launch a web site dedicated to the scheme in July 2022. 
5. In a Nutshell – First Home Scheme Ireland 2022
With monthly rents now often costing more than monthly mortgage repayments on the exact same property, buying a home can be an essential step in creating better financial and life outcomes.
The Central Bank of Ireland’s 3.5 salary limit has led to a generation of renters being unable to get on the property ladder and making this step by reducing the availability of credit by limiting mortgage sizes.
The First Home Scheme Ireland 2022 used in conjunction with the current Help to Buy scheme may help renters trapped by these rules escape, by reducing the size of mortgages required to buy a home by a further 20%.
There are some catches to bear in mind though, the only lenders in the scheme currently are PTSB, Bank of Ireland and AIB. These lenders have the most expensive mortgages on the market.
If you wanted to switch mortgage to a cheaper lender, you would have to buy out your 20% equity stake to do so. This could severely limit your options and leave you paying through the nose on your interest repayments.
Even more worryingly if you are looking to trade up a few years down the line, your equity for the trade will be worth less as you will have to take the scheme’s stake in your property into account. This could make getting the 20% deposit required for a second time buyer an impossible hurdle in some cases.
There is no doubt also that this will put further upward pressure on house prices, a similar scheme in the UK is said to have added 6% to property prices, but for those wasting thousands every month in rent, it at least offers some hope at last.
Next Steps – First Home Scheme Ireland 2022
You can find out more about the other major government support scheme, the help to buy scheme here.
Wanting to find a mortgage for your new property? Contact one of our mortgage sherpas today free of charge or you get provisional approval in 5 minutes with our instant approval calculator, so you can get going and view some properties!