The First Home Scheme Ireland 2023 allows first time buyers to borrow up to 30% of the value of their property directly from the government created scheme.
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 FHS 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 2023 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 2023 work?
2. How do I know if I qualify for the First Home Scheme Ireland 2023?
3. How much is available to me from the First Home Scheme Ireland 2023?
4. How can I apply to the First Home Scheme Ireland 2023?
5. A summary of The First Home Scheme scheme Ireland 2023.
1. How does the First Home Scheme Ireland 2023 work?
The First Home Scheme Ireland 2023 is an equity scheme, while the Help to Buy Scheme is a tax refund scheme.
It allows first time buyers purchasing newly built homes or those self building 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.
For example,
- 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 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 FHS 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 2023?
The First Home Scheme Ireland 2023 is targeted at First Time Buyers who can’t get a large enough mortgage to afford to buy a new home. One recent tweak to the scheme allows also anyone who has been served notice of eviction to also apply for the FHS scheme.
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 2023 is available to all First Time Buyers purchasing a newly built property or self building a home 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 | €475,000 | €500,000 |
| Galway City | €425,000 | €450,000 |
| Limerick City and County | €375,000 | €450,000 |
| Waterford 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) |
| Wicklow County | €475,000 |
| Kildare County | €425,000 |
| Cork, County Galway, County Kilkenny, County Meath, County Westmeath, | €375,000 |
| Co Laoise | €350,000 |
| Clare, County Kerry, County Laois, County Louth, County Mayo, County Monaghan, County Offaly, County Roscommon, County Wexford 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
The government has indicated that the FHS scheme will be extended to also include self build properties.
3. How much is available to me from the First Home Scheme Ireland 2023?
Under the First Home Scheme Ireland 2023, 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 FHS scheme is not means tested so is available for all income levels.
4. How can I apply to the First Home Scheme Ireland 2023?
If you think you qualify for the First Home Scheme Ireland 2023, then you should talk to a mortgage broker who can advise you on the best approach and which lenders work with the scheme.
There is also a web site dedicated to the scheme. [1]
5. In a Nutshell – First Home Scheme Ireland 2023
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 2023 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 the FHS scheme 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.
Also 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 2023
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!
If you have any questions about lenders or switching mortgages feel free to contact our QFA mortgage sherpas here at moneysherpa.
6 thoughts on “First Home Scheme Ireland 2023, Will It Help You Buy?”
Hello.
Myself and my husband are looking to buy in the next few years. We are both going to save from January and build savings up for a deposit for the first home scheme 2023. My husband earns 50k a year and I am only part time but my hours will go to a 32 hour week from January as I start my course for Pharmacy technician. Any advice and help would be greatly appreciated. We need guidance.
Thanks
Hi there, thanks for getting in touch. To maximise your buying budget you need to maximise your deposit and the amount you can borrow. To maximise your deposit you can use the First Home Scheme, Help to Buy and also Gifts from family. One thing that many don’t realise is that equity released on the family home or homes can also be used in some circumstances. To maximise the amount you can borrow, the key thing is the six months leading up to the mortgage application, your monthly savings plus your rent is the key number. Finally make use you get a credit report upfront to make sure there are no nasty surprises that might stand in the way of your mortgage. Hope that helps, Mark
Hello Mark,
Me and my wife recently(jan 2023) moved to ireland. We found a new build house which we both liked. I am a single earner. We don’t have a big savings, but we have enough for the booking deposits and solicitor fees. I have done some research around the First Home Scheme. Afterwards i have following questions, which may you answer:
1. Can First Home Scheme cover ours 10% deposit money?
2. How can i get the maximum of the FHS?
3. Is it really necessary to have our saving for the 10% deposit?
Hi Sourabh,
Thanks for getting in touch. If you are buying a new property and use the First Home Scheme and/or the Help to Buy Scheme you can use these as a deposit. However, your lender will look for proven ability to repay your mortgage which usually takes the form of regular savings or rent, so saving regularly can really help with that. Please note you can use both of these schemes the First Home Scheme and the Help to Buy Scheme together to get upto 40% in theory, as you have recently moved to Ireland the amount you can get with the help to buy though is likely to be limited. You can book an advice call with the team here.
Hi Mark,
My daughter works part time and unlikely to get a mortgage. She has savings of 20k, I could give her 80k, could she get 30k from first home scheme and self build a house for 130k? We could gift her a site.
Hi Marie, thanks for your question. With the First Home Scheme (FHS) now including Self Builds then it is possible that your daughter would be able to get €30K from the FHS as long as the build cost is over €100K which would be likely. If the build cost is €200K for example your daughter could claim up to €60,000 under FHS, including your €80,000 that would be €140,000 funded with the remainder to come from a mortgage for example. If your daughter has been paying income tax it’s also worth claiming the Help to Buy Scheme for the first 10% (as this does not require you to give up equity in the home). So €80,000 would be a gift, €20,000 from HTB and €40,000 from FHS. In this circumstance 20% of the house equity would be owned by FHS which would come due if the house was sold.
I’d highlight though to go to a mortgage broker to get qualified advice on your own particular case and secure your mortgage first before starting the build. There are limitations on the HTB and FHS that depend on various factors such as location etc.. Also lenders will not lend on a property that is already partially built, so even if you have finance for part of the build it is critical that all of the finance is sorted before you put a spade in the ground! Getting one on one advice from a qualified advisor is always the best first step.