First Home Scheme vs Local Authority Home Loan: Which Is Right?
Both the First Home Scheme and the Local Authority Home Loan help first-time buyers who can't quite reach market prices. But they work completely differently. Here's when each one is the right choice.
The Key Differences at a Glance
| Feature | First Home Scheme (FHS) | Local Authority Home Loan (LAHL) |
|---|---|---|
| What it is | Government takes an equity share in your home (up to 30%) | Government-backed mortgage from your local council |
| Property types | New builds, self-builds, tenant purchases | New builds, second-hand, self-builds |
| Income limit | No strict cap — based on max borrowing capacity | €70,000 single / €85,000 joint (under review 2026) |
| Requirement | Must borrow max available from a bank first | Must be refused by two mainstream lenders |
| Interest rate | Your bank's normal rate | 3.35% (25yr) or 3.85% (30yr) fixed |
| Property price limits | Regional ceilings (e.g., €500k Dublin) | Regional limits (e.g., €415k Dublin) |
| Repayment | Buy back equity share over time | Standard mortgage repayments to council |
| Can combine with HTB? | Yes | Yes |
Choose FHS If:
- You earn above the LAHL income limit (>€70k single / >€85k joint)
- You're buying a new build
- You can get a bank mortgage but it doesn't quite stretch to the price you need
- You want to use a mainstream lender (AIB, BOI, PTSB etc.)
Choose LAHL If:
- You've been refused by two mainstream banks
- You want to buy a second-hand home (FHS is new builds only for most buyers)
- You prefer a fixed rate for the full term (3.35% for 25 years is very competitive)
- Your income is below €70k single / €85k joint
Worked Example: Same Buyer, Different Schemes
Sarah earns €60,000. She wants to buy a €340,000 new build in Kildare. Her maximum bank mortgage is €240,000. She has €25,000 saved plus an estimated €18,000 HTB refund (€43,000 total deposit).
Option A: FHS
Mortgage: €240,000 from AIB at 3.50%. Deposit: €43,000. Gap: €57,000 covered by FHS equity share (16.8%). Total: she owns 83.2% from day one, government owns 16.8%. Monthly repayment: €1,078. She can buy back the equity share over time.
Option B: LAHL
She's refused by two banks (common at €60k income for €340k property). LAHL mortgage: €297,000 at 3.35% for 25 years. Deposit: €43,000. Monthly repayment: €1,456. She owns 100% from day one. Higher monthly cost but no equity share to buy back later.
The right answer depends on Sarah's priorities: lower monthly cost (FHS) vs full ownership (LAHL).
Your Next Steps
- Use both calculators to compare: FHS and LAHL
- Check your affordability to understand your baseline borrowing
- Calculate your HTB refund — both schemes allow it
- See the full cost of buying under each scenario