Darragh O'Brien Minister for Housing announced a new scheme – the First Home Scheme - to start 1st July 2022 to help the squeezed middle - those potential home-buyers whose annual incomes exceed the parameters for social housing yet are still inadequate to buy in the current challenging home market.

Sky high rents are now the order of the day for those squeezed middle. This new scheme is part of the government’s Housing for all strategy that will have no income limits for those applying.

John Lowe of MoneyDoctors.ie explains.

The government received clearance for the new scheme from the European Union, the European Central Bank and the Central Bank of Ireland with Minister O’Brien stating "I think this scheme has the potential to be a real game-changer for that group of people who can’t buy because of the gap between the finance they have and the finance they need. It will make a difference quickly."

The minister is hoping over the next 4 years to house 8,000 new home owners under this initiative and has put an initial € 400million into the kitty to start the project with promises of further funding pending its success. Three lenders have already signed up to the agreement – AIB Bank, Bank of Ireland and Permanent TSB. Other lenders are expected to join.

The scheme itself is simple enough:

- The government will buy up to 30% of a new build property for those squeezed middle… buying equity in your home until such time as you can pay back that equity.
- If the applicants buying a new property also qualify for the 10% or € 30,000 Help to Buy Scheme (HTBS) – whichever is the lesser – the maximum government equity contribution is 20% totalling 30% of the purchase price.
- Initially no interest is charged on the government equity "loan" for the first 5 years

Let’s look at an example:

- Buy a new property for € 320,000

90% loan to value would be € 288,000…. Ordinarily you would need a joint annual income of € 82,300 per annum to justify such a loan with any lender – this based on 3.5 times your joint annual incomes.

The new government scheme will allow you to:

- Take 30% of the purchase price interest free for 5 years
- Can include the HTBS grant ( 10% + 20% FHS )
- You will need mortgage approval for the 70% ( € 224,000 )
- Monthly repayments on € 224,000 would be, over 30 years, € 1,093.54 per month based on a non green 4 year fixed mortgage interest rate of 2.2%
- To justify the € 224,000 mortgage, the applicants would only need to have a joint annual income of € 64,000 … € 32,000 per applicant
- The government is essentially giving you € 96,000 (30%) on this purchase
o € 30,000 HTBS
o € 66,000 First Home Scheme


The First Home Scheme will apply to first-time buyers, but also to divorced people and those who have been made bankrupt. Worth noting.

Now you can see the benefits in black and white. Remains to be seen though what happens after 5 years – watch this space.

For more information click on John Lowe's profile above or on his website.

The views expressed here are those of the author and do not represent or reflect the views of RTÉ.