A. The Government’s new £250 million scheme came into force in September. FirstBuy unites the Government and housebuilders who will each provide a 10 per cent equity loan (interest free for five years) to 10,000 first-time buyers. The FirstBuy scheme gives you the chance to buy a new home with the assistance of an equity loan. The value of the loan is a maximum of 20% of the full price of the property. The maximum full purchase price is set at ﾣ280,000. For the first 5 years, the FirstBuy equity loan will be interest free. After that a fee will be need to be paid to the National HomeBuy Agent and the amount is 1.75% per annum on the outstanding loan. This fee will rise on an annual basis by the Retail Price Index (RPI) plus 1%. In order for you to purchase a home through the FirstBuy scheme you will need some savings that will cover the 5% deposit on the share you are purchasing. You will also need a mortgage that will cover 80% of the value of the property you are looking to purchase. The FirstBuy scheme will pay the rest of the purchase price of the property. After you have owned your home for a year you will be able to ‘staircase’ if you choose. Staircasing is purchasing a higher share of your property or making part repayments on your FirstBuy equity loan. These repayments will be at the current market value at the time and the 10% of the total market payment is minimum additional repayment you can choose. If you decide to sell your home, you will repay FirstBuy from the required percentage share of the sale proceeds of the property. For example, if your FirstBuy equity loan was originally for 30% of the full market value of your home and you had not stair cased at any point; you would repay 30% of the full market value when it came to selling. The Agency’s and house builder’s entitlement to a share of the future sale proceeds is secured through equal ranking second charges on your home. This is done in the same way that your mortgage lender will secure its lending through a first charge on your home. Although, if you buy through FirstBuy, you will have a mortgage for less than the full purchase price of the property, you will be the legal owner with 100% title to your home. Homes through the FirstBuy scheme are only available to those who can’t afford to purchase an appropriate property on the open market. Your household income must be lower than ﾣ60,000 per year and of course you must have a 5% deposit to put down.