The Scottish Government has launched a pilot scheme called First Home Fund. The scheme is to help first-time buyers with the cost of purchasing a home in Scotland.

The scheme will contribute up to £25,000 towards the cost of buying a property through a shared equity scheme.

A total of £150 million will be made available between now and March 2021.

How will First Home Fund work?

The scheme is open to all first-time buyers in Scotland. It can be used for both new-build and existing properties.

First time buyers will need a minimum deposit of about 5% and the mortgage must be at least 25% of the purchase price. There is no price cap on the purchase price.

It is a shared equity scheme, which means the purchase cost is split between the buyer and the Scottish Government.

You will own the property outright. There are no monthly payments to be made towards the Scottish Government and no interest will be charged.

The first-time buyer would repay the government’s contribution when the property is sold.

For example, if you pay 85% of the property’s value through a deposit and a mortgage, the Scottish government will hold a 15% share. When the home is sold, you would keep 85% of the final sale price and the government would receive 15%.

Over time you can also increase your share of equity and repay all or part of the government’s stake in the property.

Which lenders offer mortgages through First Home Fund?

• Bank of Scotland
• Barclays
• Glasgow Credit Union
• Halifax
• Leeds Building Society
• Nationwide
• Scottish Building Society
• Scotwest Credit Union
• TSB

Please note that lenders will have their own individual requirements when providing a mortgage. Speak with an expert mortgage adviser about what lender suits your needs.

For more information about what mortgage is right for you, speak to our expert mortgage advisers. Call 01224 316200 or fill in our online enquiry form.

Sources:
Scottish Government First Home Fund, 2020 https://www.gov.scot/collections/first-home-fund

Link Housing, 2020 https://linkhousing.org.uk/find-a-home/affordable-home-ownership/scottish-government-funded-schemes/first-home-fund/
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