Autumn Budget 2026: What It Means for Your Mortgage

Chancellor John Healey gave his first Budget on 28 October 2026. The biggest news for home buyers is a new scheme for first-time buyers. There is also good news for Lifetime ISA savers. Stamp duty stays the same. Landlords will pay more tax on rent.

Here is what changed and what it means for you.

Your First Home: buy a new build with a 2.5% deposit

The biggest housing news is Your First Home. The government is putting £4.7 billion into it. It expects the scheme to help around 70,000 households in England buy their first home.

How it works

You pay a deposit of at least 2.5% of the price. The most you can put down is 15%.
The government lends you 20% of the price. This is called an equity loan.
You get a mortgage for the rest.
You pay no interest on the government loan for five years. After that, the cost goes up bit by bit. The exact rates are not out yet.

Who can use it

First-time buyers in England.
You must buy a new-build home from a builder that has signed up.
Your household must earn £110,000 a year or less. In London, the limit is £140,000.
There is a price limit too, based on local house prices. It is £650,000 in inner London and £500,000 in outer London.

Your deposit and the government loan cover 22.5% of the price. So your mortgage is only 77.5% of the home's value. Lenders tend to offer lower rates at this level than on a 95% mortgage.

Key dates

The scheme opens in spring 2027. Reports suggest you can pre-register from December 2026. Full applications may open in February 2027, with the first loans paid in April 2027. We will share the dates once the government confirms them.

Before you sign up

Plan for year five. After five years, you start paying for the government loan. Most buyers will want a plan to remortgage or pay it back by then.
What you pay back can grow. Under the old Help to Buy scheme, you paid back a share of your home's value. So if your home went up in value, you owed more. The full rules for Your First Home are not out yet.
New builds only. You can only buy from builders in the scheme. New builds can also cost more than similar older homes.
You still need to pass the lender's checks. Lenders will look at your income and spending as normal.

Lifetime ISA savers: a better deal if you buy over £450,000

You can still save up to £4,000 a year in a Lifetime ISA. The government adds a 25% bonus. The price limit for your first home stays at £450,000.

What has changed is the penalty for buying above that limit. From 29 October 2026, the withdrawal charge drops from 25% to 20%. That matters more than it sounds.

In short, if house prices where you are buying push you over £450,000, you no longer lose part of your own savings. You lose the bonus, and nothing more.

Industry groups, including the HomeOwners Alliance, had pushed for the £450,000 cap to rise in line with London prices. That did not happen.

The new First Time Buyer ISA (from April 2029)

The Lifetime ISA will close to new deposit savers in April 2029, replaced by a First Time Buyer ISA:

Pay in up to £4,000 a year.
A 25% government bonus, paid on your balance when you withdraw it to buy a qualifying first home (up to £450,000).
Total bonus capped at £20,000.
No upper age limit, unlike the Lifetime ISA, where you must open the account before you turn 40.
No withdrawal charge.

If you already hold a Lifetime ISA, you can keep paying into it under the current rules.

Stamp duty: no change

Despite calls from across the property industry, stamp duty was left untouched. First-time buyers in England and Northern Ireland still pay:

Nothing on the first £300,000.
5% on the portion between £300,000 and £500,000.
If the price is above £500,000, first-time buyer relief does not apply and standard rates are due on the whole price.

The 5% surcharge on second homes and buy-to-let purchases also stays.

Landlords: higher tax on rental income

From April 2027, landlords who own property in their own name will pay higher income tax rates on rental profits. Reported rates are 24%, 44% and 49% for basic, higher and additional rate taxpayers. Landlords who hold property through a limited company are taxed differently.

If you are a landlord, now is a good time to review your mortgage costs alongside your tax position. Speak to an accountant about the tax side, and to us about whether your current buy-to-let deal still makes sense.

High-value homes: the council tax surcharge

The High Value Council Tax Surcharge, often called the mansion tax, goes ahead for homes worth £2 million or more, with first bills due in 2028. The surcharge ranges from £2,500 to £7,500 a year on top of normal council tax. The government also confirmed a deferral scheme, plus discounts and exemptions.

What about mortgage rates?

The Budget does not set mortgage rates. Those follow the Bank of England base rate, currently 3.75%, and swap rates in the money markets, which lenders use to price fixed deals.

Mortgage rates crept up in the run-up to the Budget, and the Bank of England's next rate decision is on 5 November 2026. The Office for Budget Responsibility now expects house prices to grow by around 2% this year and 2.5% in 2027, held back by higher mortgage rates.

There was little in this Budget aimed at existing homeowners. If your current deal ends in the next six months, many lenders will let you secure a new rate now, and you can usually switch to a better one if rates fall before you complete.

What to do next

First-time buyers: start getting your paperwork ready and find out what you could borrow, so you are ready when Your First Home opens.
Lifetime ISA savers: check whether the price cap affects the homes you are looking at, and factor in the new 20% charge.
Homeowners remortgaging soon: review your options now.
Landlords: check how the April 2027 changes affect your rental profit and your buy-to-let mortgage.

Talk to Tony

Award-winning mortgage adviser, Anthony Mallandain. North London.

Whether you are buying your first home, moving or remortgaging, our advisers can explain what the Budget means for you and search the market for the right deal. Book a free, no-obligation online mortgage appointment with Tony.

Frequently asked questions

The scheme launches in spring 2027. Industry reports point to pre-registration from December 2026 and the first loans from April 2027.
No it's not. The scheme covers England only.
No. First-time buyers still pay nothing on the first £300,000 of a purchase up to £500,000.
Yes you can. Existing Lifetime ISA holders can keep saving under the current rules, and the withdrawal charge for buying above £450,000 is now 20%.
The Budget itself does not change mortgage rates. The next Bank of England decision on 5 November 2026 and movements in swap rates will have more effect.

Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. Skyline Mortgages does not give tax advice: please speak to a qualified tax adviser. Information correct as of 28 October 2026 and based on Budget announcements, which may change before the schemes launch.