Your guide to government mortgage schemes

Overview

Government Support Schemes:

• Help-to-Buy (HTB): A tax rebate of up to €30,000 (or 10% of property value) to assist with the deposit. Only applies to new-build/self-build homes valued under €500,000.
• First Home Scheme (FHS): A "shared equity" initiative where the state bridges the gap between your mortgage and the house price by taking a percentage stake (up to 30%, or 20% if used with HTB).
• FHS Service Charges: No fees apply for the first 5 years; tiered service charges begin in Year 6 (starting at 1.75%) to maintain the state's equity stake.

Incentives & Market Considerations:

• Cashback Offers: Various lenders offer up to 3% cashback upon drawdown, though these often carry higher long-term interest rates.
• Eligibility: Government schemes are strictly reserved for First-Time Buyers (with exceptions for divorced/bankrupt individuals) and owner-occupiers.
• Property Type: Both the HTB and FHS are exclusive to new-builds or self-builds; second-hand homes do not qualify for these specific supports.

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Introduction

Buying your first home is an exciting milestone in everyone’s life. But between saving for a deposit and dealing with ever rising property prices, it can seem out of reach for many. 

The good news is that there is a wide range of support available to help you. Whether it’s government-backed schemes designed to help with your deposit or bridge affordability gaps, or lender incentives such as cashback offers, there are more options than ever to help you get onto the property ladder.

This guide breaks down the key supports available to buyers in Ireland today, explaining how each one works and who can benefit.

But before you start exploring these schemes or applying for a mortgage, it’s essential to understand the rules that underpin the entire system.

Government support: The Help-to-Buy Scheme

Saving the 10% deposit is often the biggest hurdle for prospective homeowners. This is where the Help-to-Buy (HTB) incentive comes in. 

This is a tax refund scheme designed specifically to help first-time buyers accumulate the deposit needed to buy their first home.

How it works

The Help-to-Buy scheme allows you to claim a tax rebate of up to €30,000 or 10% of the purchase price of a new-build property or self-build home — whichever is lower.

• The relief is available on properties valued at €500,000 or less.
• If the purchase price is over €500,000, you receive no relief at all.
• This is a refund of income tax and DIRT you have paid over the previous four years. You must be fully tax compliant to qualify. PRSI and USC payment don’t qualify for calculating the refund you’re due. 

Who is eligible? 

This scheme only applies to first-time buyers and owner-occupiers. And you must live in the property for at least five years after you buy it. Otherwise, Revenue may claw back the refund. 

If you’re making a joint mortgage application with a partner, you must both be first-time buyers. If either of you has previously bought a home in Ireland or abroad you won't qualify.

Only new-build and self-build homes qualify. Second-hand homes do not.    

If you are divorced or have been declared bankrupt, and had previously bought a home, you can also apply. But you must no longer have any interest or share in your former home(s).

Practical example

If you want to buy a new home for €300,000, you’ll require a minimum 10% deposit — or in this case €30,000. As long as you have paid this much in income tax and/or DIRT over the last four years, you can claim the full €30,000 back through Revenue. This could effectively cover your entire deposit requirement under the Central Bank rules.

Bridging the Gap: The First Home Scheme

Even with a deposit sorted, many buyers find that their maximum mortgage (four times salary) plus their deposit still falls short of the price of a new home. The First Home scheme (FHS) was launched to solve this specific affordability problem.

How it works

The FHS is a "shared equity" scheme. Essentially, the government steps in to bridge the gap between the mortgage you can get and the price of the home you want to buy. In return, the government takes a percentage stake (share) in your property.

The government can provide up to 30% of the property price. However, if you’re also using the Help-to-Buy scheme, this limit drops to 20%.

There is no income limit for applicants, but there are price caps on properties that vary by local authority area.

Who is eligible?

The eligibility is the same as for the help-to-buy scheme: first-time buyers of newly built or self-build homes.  

There is no income limit for applicants but there are price caps on the property you can buy that vary by local authority area.

You must also get a mortgage from a lender that is participating in the scheme. At present this is AIB and its subsidiaries EBS and Haven, Bank of Ireland and PTSB.

Practical example

Let’s say you’re earning €60,000 a year. And you want to buy a property that costs €300,000.

You have the minimum deposit of €30,000 i.e. 10%.

Under the Central Bank’s mortgage lending rules you can only borrow up to four times your income, or in this case €240,000. So you’re short €30,000.

Under the First Home Scheme the Government will give you €30,000 (or 10% of the property price in this example) in return for a stake in your home.

You can repay or “buy out” the Government’s stake in your home at any time if you wish. But you’re under no obligation to do so. However a service charge will eventually apply to the money the Government has stumped up unless you pay it back. 

Service charges and repayment

There are no fees for the first five years. But a service charge applies from year six onwards to cover the scheme's maintenance. 

You can pay the service charge by monthly direct debit, electronic funds transfer (EFT), or via a debit card. You can pay in full each year or make 12 instalments. 

Years 0–5: 0%

Years 6–15: 1.75%

Years 16–29: 2.15%

Years 30+: 2.85%

It’s important to remember that this charge is on top of the amount you owe the Government (and your mortgage). 

The service charge that you pay will not reduce the Government's stake in your home, which will still be repayable at some stage.

An important point regarding the equity…

It's important to remember that the Government is providing an equity stake in your home. So the amount you owe will rise or fall depending on the price of your home. 

So let's say you buy a home for €300,000 and the Government has provided €30,000 or 10% (as in the above example). 

If you go to sell your home in a few years' time and its value has risen to €400,000, the Government will actually claw back €40,000 (which is 10% of the new price). 

On the other hand, if the value of your home has fallen in the meantime, then the amount you owe will fall too. 

Buying out the government’s stake 

You can repay the government’s stake at any time — either in one go or through partial payments. However you're under no obligation to do so and can theoretically live in your home for the rest of your life without paying back the Government's stake.

But you must pay back the Government's stake if you sell your home, move out, switch to a non-participating lender, or pass away, in which case the money will be taken from your estate.

Incentives and cashback

Many lenders offer incentives such as cashback to help with the costs of buying your new home. 

The tax-free money is usually paid into your current account within a month or two of you drawing down your mortgage and can be great to help pay for furniture for your new home or maybe pay back the “bank of mum and dad” who may have helped with your deposit. 

Some lenders offer up to 3% cashback. So if you took out a €300,000 mortgage you could get up to €6,000 in cash. 

However, be cautious. The lenders offering substantial cashback often charge higher interest rates. So you should weigh up the immediate cash benefit against the long-term cost of a higher monthly repayment.

Conclusion

Securing a mortgage in Ireland involves balancing strict Central Bank rules with generous government schemes designed to get you over the line. By utilising the Help-to-Buy scheme for your deposit and the First Home scheme to boost your buying power, owning a newly built home is more achievable than the raw lending limits might suggest.

Remember that interest rates and offers vary wildly between lenders. A variation of even 0.5% in your interest rate can cost you thousands of euro over the lifetime of your loan. It is vital to look beyond the "headline" offers and calculate the total cost over the fixed term.

Always shop around to ensure you are getting the best value for your specific circumstances. Our mortgage broker service at bonkers.ie can handle this complexity for you, comparing the market to find the best package of rates, incentives, and repayment terms for your needs.

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