Buying a Home in Ireland Without a Big Mortgage: How the First Home Scheme and Shared Equity Work in 2025
For Irish buyers struggling with large deposits or strict mortgage limits, the First Home Scheme and shared-equity models continue to provide new pathways into homeownership in 2025. These schemes reduce upfront costs and increase borrowing capacity, but come with long-term obligations, equity stakes and eligibility rules. This guide breaks down how they work, who qualifies, financial implications and key considerations before applying.
Buying a home in Ireland in 2025 often means balancing deposit savings, lending limits, and new-build prices. Shared-equity supports are designed to close the funding gap so you do not need as large a loan. The trade-off is that the State or a public body takes a percentage stake in your home that you can repay over time. Knowing how this stake is calculated, who qualifies, and the costs involved can make the difference between a smooth purchase and an expensive misstep later on.
How shared-equity schemes work
Shared equity means a third party contributes part of the purchase price in return for an ownership share. With the First Home Scheme (FHS), that share is the difference between your home’s price and what you can fund using your deposit and the maximum mortgage your lender will offer, up to a cap. In many cases the equity share can be up to 30% of the price, or up to 20% if you also use the Help to Buy tax refund. The percentage is fixed at purchase but the euro value rises or falls with the property’s market value.
Over time you can buy back (also called “staircase”) some or all of the equity. You can make voluntary redemptions, and the share is typically repaid when the home is sold or by the end of your mortgage term. The FHS applies a yearly service charge on the outstanding equity from year six onward; it is not interest on a loan but a fee for holding the equity stake. The share must usually be fully cleared if you sell, switch to a buy-to-let, or cease to occupy the property as your principal private residence.
Who qualifies under 2025 rules
Eligibility focuses on first-time buyers and certain “fresh start” applicants who no longer own a home due to events like separation or insolvency. The property must be a new-build home or a self-build used as your principal private residence. There are price ceilings that vary by local authority area and property type, so it’s important to check the limit for your chosen location in your area. You must also secure mortgage approval with a participating lender and confirm that you are borrowing at your maximum allowable level under Central Bank lending rules.
In general, buyers need a minimum deposit (commonly 10% for first-time buyers), stable income, and standard affordability checks to get a mortgage approval in principle (AIP). The equity support then bridges the gap between the home’s price and your own funds plus your mortgage, subject to scheme caps and property price ceilings. Applicants should be prepared to live in the home and comply with occupancy and insurance conditions.
Costs and long-term obligations
Plan for both upfront and ongoing costs. Upfront expenses typically include stamp duty (often 1% on the portion up to €1 million), solicitor fees and outlays, survey and valuation fees, and insurance. Ongoing mortgage repayments continue as normal to your lender. For the FHS, a service charge on the equity share generally applies from year six: 1.75% per year in years 6–15, 2.15% in years 16–29, and 2.85% from year 30 onward. While not interest, it is a running cost you must budget for.
Remember that the equity share is a percentage. If your home’s value increases, the cost to redeem the share rises proportionally. Redemption may be required when selling the property, at the end of your mortgage term, or if you change how the home is used. Inspections, consents for certain remortgages or second charges, and proof of insurance can also be part of your obligations under shared-equity agreements.
Documents and steps to apply
- Get mortgage approval in principle from a participating lender. Gather payslips, Employment Detail Summary/P60 equivalent, bank statements, ID, proof of address, and saving/deposit evidence.
- Check local authority price ceilings for your target area and confirm the property qualifies (new-build or self-build, owner-occupied).
- Register on the First Home Scheme portal and complete the eligibility checker. You will be asked for your AIP details, property information, and purchase price.
- Reserve the property with the developer or builder and obtain a booking form/receipt. Upload requested documents to the scheme portal.
- Receive a scheme approval letter setting out the equity percentage and conditions. Provide this to your solicitor and lender.
- At drawdown, sign the equity facility agreement alongside standard purchase contracts. Your solicitor will coordinate funds from your lender, your deposit, and the equity amount to complete the purchase.
- After completion, keep records of the equity share and service charge schedule. If you plan partial redemptions, request valuations and follow the scheme’s redemption process.
Common mistakes buyers should avoid
- Treating the service charge like mortgage interest. It is separate, starts in year six, and can rise in later decades—budget for it.
- Ignoring future value risk. Because the share is a percentage, rising property values increase the cost to buy it out.
- Choosing a non-participating lender or a property above the local price ceiling, which can derail the application late in the process.
- Underestimating upfront costs such as stamp duty, legal fees, and surveys; this can squeeze your cashflow near completion.
- Planning to rent out the home without checking restrictions. Most shared-equity arrangements require owner-occupation and consent for changes.
- Delaying redemption planning. Even small partial repayments can reduce future service charges and exposure to house-price growth.
In 2025, here is how common options compare on providers and costs at a high level.
| Product/Service | Provider | Cost Estimation |
|---|---|---|
| First Home Scheme (shared equity) | Government-backed First Home Scheme DAC with participating lenders (e.g., AIB, Bank of Ireland, Permanent TSB, EBS, Haven) | Equity up to 30% (or up to 20% with Help to Buy). Service charge typically 1.75% (years 6–15), 2.15% (years 16–29), 2.85% (year 30+). Redemption equals the same share of current market value. |
| Local Authority Affordable Purchase Scheme | Local authorities | Discounted purchase with a local authority equity share typically repayable on sale or buy-out. No annual service charge in many cases; buyer covers standard purchase costs and any admin fees. |
| Help to Buy (tax refund) | Revenue Commissioners | Tax refund up to €30,000 (subject to eligibility) that can contribute to the deposit for qualifying new-builds/self-builds. Reduces the equity needed from other sources. |
| Standard owner-occupied home loan | Banks and credit unions (e.g., AIB, Bank of Ireland, Permanent TSB, select credit unions) | Interest rates vary by lender, term, and fixed/variable choice. Typical total costs include interest, valuation (€150–€250), legal fees (approx. €1,500–€3,000), stamp duty (often 1% up to €1m), plus insurance. |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
A careful plan can reduce your mortgage size while keeping future obligations manageable. Shared equity can help bridge the gap to buy a suitable home, but it introduces additional costs and rules that require attention. Reviewing eligibility, budgeting for service charges and legal costs, and documenting each step will put you in a stronger position to purchase and to manage the equity stake effectively over time.
