How a couple buying a €400,000 home only need a €10,000 deposit

Michael Broderick of First Home Scheme is amazed so many people who want to buy a property are unaware of the supports available

We’ve all heard the complaint: how can young people buy a house when they can’t even save the 10pc deposit that’s needed?

But there is a way, says Michael Broderick, chief executive of the First Home Scheme – and he’s surprised more of us don’t know about it.

The key is this: those buying new-build houses for less than about €500,000 can use both the First Home Scheme and the Help to Buy tax rebate, two government-backed initiatives.

“Let’s say somebody is looking to purchase a home for €400,000,” is the example Broderick gives. “They have an annual income of €75,000, so they can borrow four times that amount. That gives them €300,000.

“They must have a 10pc deposit, which is €40,000. But if they qualify for Help to Buy, they can get €30,000. Then they can potentially get €60,000 from ourselves.

“So now between the mortgage, Help to Buy and the First Home scheme they have €390,000. So all they have to save is €10,000.”

He’s not dismissive of how difficult it may be to save €10,000 – but let’s be honest: it’s doable with an income of €75,000.

It’s the key to unlocking the deposit dilemma that people find themselves in

It means the stereotypical example of a teacher married to a garda would need only 2.5pc of the purchase price of a new house in order to get their feet onto the property ladder. Yet, few of them seem to know that.

“The amount of young Irish couples I meet at events who are completely unaware of Help to Buy in this day and age never ceases to amaze me,” Broderick says. “Yet it is the key to unlocking the whole deposit dilemma that people find themselves in.

“Rather than thinking they have to save €40,000, using the two schemes all they have to save is €10,000.”

Though the First Home Scheme has passed its third birthday, Broderick says the biggest challenge is raising awareness. A joint initiative between the State and the three main banks, the scheme offers funding of up to 30pc of the purchase price or build-cost of a new house, in return for an equity share.

One reason why people might be confused, of course, is because of the plethora of schemes and quangos that have been set up by governments desperately thrashing around trying to solve the “housing crisis”. But Broderick also suspects not enough potential home buyers are really educating themselves about what’s out there.

“Irish people as a cohort tend to steer away from finance. I appreciate that’s a bit of a generalisation, but people do,” he says, adding that “personal finance” is something we should be learning about at school.

The First Home Scheme boss gets some odd questions from potential customers at roadshows. “Will the Government own part of my house?” is one.

He answers this by asking a question of his own: does the home buyer feel their lender or mortgage provider will own part of their home? No? Exactly.

“I’ve been asked at events, will you be coming and inspecting my house? If I want to change the colour of a room, do I have to get permission? Clearly not.”

I think a lot of this is being driven by social media

The theory put forward by the 59-year-old former army officer is that young people today don’t have the same trust in government as his generation did.

“We see the harp as a sign of security and safety, but there’s a generation who don’t. They see government being involved as not necessarily a good thing.

“I think a lot of this is being driven by social media. There’s lots of conspiracy theories out there. People today just don’t get the same level of security from seeing a government harp stamped on something that they once did.”

And yet, as I sat in his office in Dublin’s Mount Street last Monday, the First Home Scheme passed a notable landmark – 4,000 homes funded. They were three short of the total last Friday, but Monday is often a busy day – you can get up to 25 completions.

It’s not just first-time buyers of new properties the scheme is helping.

Tenants can use it to buy the home they are currently renting, and self-builders can get support. There’s also help for “fresh starters” – divorcees who lose the family home and have to start again.

“That’s particularly helpful, because of lot of those people are in their 40s, maybe even 50s, and their ability to raise a mortgage is considerably reduced,” Broderick says. “They can use the First Home Scheme to plug the gap.

“I have seen the results first-hand. I was at an event in south Dublin, probably a year ago now, and a lady and her 19-year-old son came up to me. They were renting but under pressure, and she was trying to find a place to buy.

“She wasn’t aware she could use the scheme. I went through the numbers with her, and she could.

“And she literally started crying in front of me. She thought she’d never have an opportunity to own a home again.

“I appreciate it’s a small cohort, but this is really life-changing for those people.”

While often referred to as a “state scheme”, First Homes is a partnership between the Government and the banks, each putting up half the seed capital of €740m.

The average price of the house bought under the scheme is €385,000 and €66,000 is the average amount each customer has received, representing 17pc of the value of the property.

Because it’s equity and not debt, there is no fixed repayment date. In theory, you need never repay until you die – when it would come out of your estate.

Apart from death, there are three other scenarios in which the equity share has to be repaid: if you sell the property, if it’s no longer your primary dwelling, or if you refinance your mortgage with a bank that’s not part of the scheme.

A service charge does kick in after five years, levied at 1.75pc, and that goes up to 2.15pc after 15 years. Even that can be rolled up on a simple-interest basis, however.

While there is no pressure to repay the equity stake, it makes financial sense to do so when property values are rising. Only 50 of the 4,000 people in the scheme have done so to date, while another 80 or so have made partial repayments.

When more home buyers pass the five-year mark, and the service charge of 1.75pc kicks in, we can expect more equity to be redeemed.

In the case of a mortgage default, the First Home Scheme will play second fiddle to the banks, which have first charge. Also, the scheme’s second charge is on the property, not on the person.

“So if you default on your mortgage, the bank comes first, and then if there’s any value left after the mortgage has been repaid, we come second.

“If there isn’t, we don’t have recourse to the individual,” Broderick confirms. “We just have recourse to the property.”

Given that the banks have such favourable terms, it’s a surprise more of them haven’t joined AIB, Bank of Ireland or PTSB in the scheme.

When it was set up in 2022, there were reports that some of the other players had misgivings about who got priority in the case of a repossession.

“I think there was a misunderstanding around that time. It was said to me that some banks’ funders from abroad were nervous. I think they misinterpreted how the scheme was operating,” Broderick says.

“And I think they assumed we were taking on people of a lower credit quality and standard.

“That’s not the case. Every customer has to be approved by AIB, Bank of Ireland or PTSB for a mortgage.

“If anything, the scheme is de-risking the institutions, because they have another 20pc headroom over what they would normally have. But look, there was a misunderstanding there. We clarified those points with them.”

Yet, three years later, there is no sign of any of the others getting involved. Broderick says he is in “early days” talks with one player – he won’t say which one –and is “hopeful” it will join the scheme.

There is a cost to banks, he points out, because the expense of running the First Home Scheme comes out of the seed funds.

He insists that it is a lean organisation, with just six staff, “because as our shareholders are quick to point out, every employee is potentially a house less that we can fund.”

Broderick also suspects some lenders have as much business as they can handle, and don’t need more mortgages.

“I know some of them, without naming names, have been maxed out for the last two or three years in terms of trying to do the day-to-day business that they’re getting in – so, you know, they don’t need any more.”

What, then, of claims that First Home only serves to push up property prices? After all, adding liquidity to an already inflated market would seem to make no economic sense.

It doesn’t cause the level of house-price inflation that some people think

It’s a concern Broderick takes to heart. So much so that he has commissioned two studies from KPMG to examine whether the scheme is contributing to inflation. On both occasions, the answer was no.

Given that only 4,000 homes have been bought, it stands to reason that First Home is not moving the markets.

“Look, I’m not naive enough to sit here and say it’s not contributing anything. It may well be a small percentage, but not the level of inflation that people think – not the 10 or 15pc.

“KMPG looked at the level of house- price inflation in each local authority area. And the ones that had the highest were where we were doing the least business. So that shows there is no correlation between house-price inflation and the First Home Scheme.”

Given that he was once both a pilot and a member of the army’s diving group, you could say that Michael Broderick has both scaled the heights and plumbed the depths.

These days, he’s adjusting price ceilings on the First Home Scheme. So far, they’ve only gone up, in line with rising property prices.

“We review price ceilings twice annually, and they can go up or down,” Broderick points out.

“So if somebody says to us that we’re way out of kilter in Dublin in terms of price ceilings, we can pull those back down – in the same way that we put them up.”

Yes, property prices can go down as well as up? Never forget.

John Burns, Irish Independent, 11th September 2025