First Home Scheme vs Help to Buy Ireland: Which to Use and Can You Combine Them?

Both schemes help first-time buyers get into a new-build property. Both are state-backed. But they work fundamentally differently — and the decision between them (or whether to combine them) has consequences that extend for years after you move in.

Here's the comparison that actually matters for decision-making.

The Core Difference: Money You Keep vs Equity You Share

Help to Buy gives you money that is yours permanently. It's a refund of income tax and DIRT you already paid to Revenue — not a loan, not an equity stake, not something that needs to be repaid. Once you've met the five-year occupancy requirement, there's no future cost.

The First Home Scheme gives the State a percentage ownership of your property. The State's equity share tracks the market value of your home — if property prices rise, the cost to buy out that equity stake rises proportionately. Service charges begin in year six (1.75% per year) and escalate over time. You'll eventually need to buy out the equity, either when you sell or proactively if you want to own your home outright.

This is the fundamental distinction. HTB is money from your past (tax already paid). The FHS is a claim on your future (a portion of any property value growth).

What Each Scheme Provides

When HTB Alone Is Sufficient

If the HTB refund (up to €30,000) combined with your personal savings covers the full 10% deposit, and your mortgage capacity covers the remaining 90%, you may not need the FHS at all.

Example: Buying a €300,000 new build. 10% deposit = €30,000. If your HTB refund is €30,000, you've fully funded the deposit with zero personal savings and need only an income sufficient to borrow €270,000 (€67,500 combined income at 4x). In this scenario, using the FHS would add an unnecessary equity complication.

When the FHS Becomes Necessary

The FHS is essential when your maximum mortgage (4x income) plus your available deposit (including any HTB refund) falls short of the purchase price.

Example: A couple with €80,000 combined income can borrow €320,000. Their HTB refund is €25,000. They have €10,000 in savings. Total purchasing power: €355,000.

If they want to buy a €400,000 new build, they're €45,000 short. The FHS can provide that €45,000 — an 11.25% equity stake. They purchase the home; the State holds 11.25%.

This is the FHS's purpose: to bridge the gap between standard Central Bank borrowing capacity and the actual price of new builds in the market.

What Happens When You Combine HTB and FHS

You can use both schemes simultaneously on the same purchase. When you do, the maximum FHS equity contribution drops from 30% to 20% of the purchase price. This is because HTB has already helped with the deposit, reducing the gap that FHS needs to bridge.

In the example above:

• €400,000 purchase
• HTB: €25,000 (covering part of the 10% deposit)
• FHS: up to 20% of €400,000 = up to €80,000 (but they only need €45,000)
• Mortgage: €320,000
• Their savings: €10,000 completing the 10% deposit

Total: €320,000 + €80,000 FHS + €25,000 HTB + €10,000 savings... but these numbers need to fit into the purchase price exactly. In practice, your solicitor and the FHS portal walk you through the exact calculation.

The Long-Term Cost of the FHS: Why the Buyout Matters

The FHS equity stake doesn't disappear. It either gets bought out when you sell (the State receives its percentage of the sale price) or you proactively buy it back earlier.

Because the buyout is calculated on the property's current market value at the time of redemption, property price inflation works against you. If the home purchased at €400,000 (with a 10% FHS stake = €40,000 contributed) rises to €500,000 over 10 years, buying out the FHS equity costs €50,000 — €10,000 more than was contributed.

Additionally, from year six, a 1.75% annual service charge applies to the original equity amount (€700/year in this example). From year 16, it rises to 2.15% (€860/year). From year 30, it rises to 2.85% (€1,140/year).

The financially savvy approach: use the FHS to get into the home, then make voluntary partial buyouts (minimum €10,000) as savings recover, prioritizing clearing the equity stake before year six when service charges begin.

The FHS "No Exception" Rule

If you're using the FHS, you cannot also use a Central Bank LTI mortgage exception. You must borrow the maximum available to you under standard rules (exactly 4.0x income) before the FHS will contribute. The scheme is specifically for buyers who have genuinely exhausted their standard borrowing capacity — not for buyers who want to borrow a bit less and have the FHS cover the comfortable remainder.

Which Should You Choose?

Use HTB if: The refund covers enough of your deposit that your mortgage capacity reaches the full purchase price. You pay no ongoing costs after the five-year occupancy period.

Use both HTB + FHS if: Even with the HTB refund and your personal savings at the 10% deposit level, your maximum mortgage falls short of the purchase price you need.

Use FHS alone (no HTB) if: You've owned property before (not a first-time buyer for HTB purposes), but qualify as a Fresh Start applicant under FHS rules. Or if your income tax paid over four years is minimal, making the HTB refund negligible.

Use neither if: You're buying second-hand. Both schemes are exclusively for new builds and self-builds.

The Ireland First-Time Home Buyer Guide includes worked examples for the most common income and purchase price combinations, showing exactly which scheme combination produces the best financial outcome for your specific situation.

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