Buying Back Your Equity: The Hidden Cost of the First Home Scheme
The First Home Scheme helps you buy today — but the government's equity share grows with your property's value. A 20% share on a €400,000 home could cost €56,000 to buy back after 10 years. Here's what you need to understand before signing up.
How the Equity Share Works
When you use FHS, the government (or participating bank) takes an equity share in your home — say 20%. You don't pay rent or interest on this share. But when you come to buy it back, you pay 20% of the current market value, not 20% of the original price.
| Year | Property Value (4%/yr) | 20% Equity Share Value | Cost to Buy Back |
|---|---|---|---|
| Purchase (Year 0) | €400,000 | €80,000 | €80,000 |
| Year 5 | €486,661 | €97,332 | €97,332 |
| Year 10 | €592,098 | €118,420 | €118,420 |
| Year 15 | €720,371 | €144,074 | €144,074 |
| Year 20 | €876,446 | €175,289 | €175,289 |
FTB Starter Kit
9 tools for first-time buyers. Viewing scorecards, mortgage checklists, cost breakdowns at 4 price points.
Is It Still Worth It?
Yes, in most cases. The alternative — not buying at all — means paying rent (which builds zero equity) and waiting for prices that may continue rising. The FHS equity share is an "interest-free loan" indexed to property values. If you plan to buy back within 5–10 years, the total cost is typically less than what you'd have paid in rent during those years while saving for a bigger deposit.
The key is to budget for the buyback. Treat it like a savings goal: put aside the equivalent of your FHS equity share divided by your target buyback year. For a €80,000 share bought back in year 10, that's €8,000/year or €667/month.
When to Buy Back
- As soon as you can: Remortgage to release equity and buy back the share. The sooner you do it, the cheaper it is.
- When you sell: The government's share is automatically settled at sale. No separate transaction needed.
- When you remortgage: You can buy back all or part of the share during a remortgage or switch.
- Partial buyback: You can buy back a portion (minimum 5%) at any time.
FHS vs Saving for a Bigger Deposit
The question isn't just "is FHS expensive long-term?" — it's "is FHS cheaper than waiting?" If you wait 5 years to save €80,000 more, property prices will have risen by roughly 20% (at 4%/year). The €400,000 home now costs €487,000 — and you've paid €90,000+ in rent during those 5 years. In most scenarios, buying now with FHS and buying back the share in 5–10 years is financially better than waiting.
Use our Deposit Savings Calculator to model the "save and wait" scenario, then compare with FHS.