On this page
- The short answer
- First Home Scheme costs at a glance
- Estimate your possible service charges
- Current FHS service charge bands
- What figure is the service charge applied to?
- Worked example: €50,000 FHS equity share
- Payment, deferral and cash-flow planning
- Does the service charge reduce the equity share?
- When the service charge should change your decision
- Next steps
The short answer
The First Home Scheme does not charge a service charge for the first five years after drawdown. From the start of year 6, a service charge applies if any FHS equity share is still outstanding.
The key point is that the service charge is different from the redemption amount. Redemption is about buying back the FHS percentage at the relevant property value. Service charge is the ongoing charge for the equity facility while the share remains in place.
This page is written for planning. Always check your own Customer Contract and the official FHS service charge page before making a redemption, switching or sale decision.
First Home Scheme costs at a glance
The First Home Scheme does not work like a normal personal loan. The main long-term costs to understand are the FHS equity share itself, possible service charges from year 6, legal or valuation costs around redemption or sale, and normal property costs that sit outside the scheme.
| Cost or obligation | When it matters | What to plan |
|---|---|---|
| FHS equity share | When you redeem, sell, switch or trigger mandatory redemption | The euro amount can rise or fall with property value. |
| Service charge | From year 6 if equity remains | Starts at 1.75% per year in the first paid band. |
| Deferral balance | If you defer service charges | Deferred charges still need to be dealt with later. |
| Solicitor / valuation costs | During purchase, redemption, sale or switching | Check your own solicitor and FHS requirements. |
Estimate your possible service charges
Use this calculator to estimate the annual and total service charges if your FHS equity share stays in place. It is a planning tool only and does not calculate the redemption value for buying back the equity share.
Over selected years
| Period included | Rate | Annual charge | Years counted | Subtotal |
|---|---|---|---|---|
| Enter your details and calculate. | ||||
Current FHS service charge bands
| Scheme year | Service charge rate | Planning meaning |
|---|---|---|
| Years 0–5 | 0.00% | No service charge during the first five years. |
| Years 6–15 | 1.75% per year | The first paid band. This is the point many buyers try to avoid by redeeming early. |
| Years 16–29 | 2.15% per year | The annual charge steps up if the equity remains in place long term. |
| Year 30+ | 2.85% per year | The highest published band and usually not where buyers want to leave a large FHS share. |
The published rates are fixed for the life of the equity facility, but your own documents should always be checked before relying on any planning estimate.
What figure is the service charge applied to?
A common misunderstanding is to mix up the service charge calculation with the buy-back calculation. They are related, but they are not the same.
- Service charge: generally calculated using the original property purchase price or build cost, the FHS equity share percentage, and the service charge rate for the relevant year.
- Redemption amount: based on the FHS percentage and the property value used for redemption, subject to the scheme valuation rules.
- Partial redemptions: reduce the remaining FHS equity share percentage, so future service charges should reduce in line with the smaller remaining share.
In simple terms, service charges are the ongoing cost of keeping the equity facility open. Redemption is the cost of buying the FHS share back.
Payment, deferral and cash-flow planning
The official scheme allows the service charge to be paid annually or monthly. Buyers who cannot pay may be able to defer, pause or reduce payments depending on the circumstances, but deferral does not make the amount disappear. It still has to be dealt with later.
For planning, treat year 6 like a deadline:
- Year 1: record your FHS percentage and save the Customer Contract safely.
- Year 3: check what a partial or full redemption might cost if your income has improved.
- Year 4–5: review mortgage switching, savings, gifts or remortgage options before the paid band begins.
- Year 6: if any share remains, build the service charge into your annual housing budget.
When the service charge should change your decision
The service charge does not automatically make FHS a bad option. It may be the difference between buying a suitable home and not buying at all. The risk is taking the scheme without understanding the long-term obligations.
| Buyer situation | Planning angle |
|---|---|
| You expect higher income within 3–5 years | FHS can work as a temporary bridge if you realistically plan to redeem early. |
| You are already stretching monthly affordability | The year-6 charge may become uncomfortable unless income rises or the share is redeemed. |
| You plan to move again soon | Think about sale/redemption costs and how much equity you will keep after sale. |
| You want to keep the home for decades | A long-term unredeemed share can become expensive and should be planned carefully. |
Next steps
- Understand the percentage itself: First Home Scheme Equity Share Explained.
- Plan how to buy it back: Redeeming or Buying Back Your FHS Equity Share.
- Estimate year-6 and long-term charges: FHS Service Charge Calculator.
- Estimate the funding gap: First Home Scheme Calculator.
- Check the property limit first: FHS Price Ceiling Lookup.
Frequently asked questions
When do First Home Scheme service charges start?
They start from year 6 if any FHS equity share is still outstanding. Years 1 to 5 have a 0% service charge.
What are the current service charge rates?
The current published rate bands are 0% for years 1 to 5, 1.75% for years 6 to 15, 2.15% for years 16 to 29, and 2.85% from year 30 onwards. Check your own FHS documents and the official service charge page before relying on figures.
Is the service charge the same as buying back the FHS share?
No. The service charge is the ongoing charge for keeping the equity facility open. Buying back the share is a redemption payment and is based on the FHS percentage and the property value used for the redemption calculation.
Can I avoid the service charge completely?
Yes, if you redeem the full FHS equity share before year 6. Partial redemption before year 6 can also reduce the amount that future service charges are calculated on.
Can I defer the service charge?
The official scheme explains that payment options and deferral may be available, but deferred amounts still need to be dealt with later. Do not treat deferral as a waiver.
Does paying the service charge reduce my FHS equity share?
No. Paying the service charge keeps that charge up to date, but it does not buy back the FHS percentage. Redemption is a separate process.
Does property value growth increase the service charge?
Property value growth mainly affects the redemption amount. The service charge calculation is separate and is generally linked to the original purchase price or build cost, the FHS equity share percentage and the relevant service charge rate.
Should I plan redemption before year 6?
For many buyers, yes. Year 6 is the point where the service charge begins, so year 4 or 5 is a sensible time to review savings, mortgage options and partial or full redemption.
Sources & references
Related calculators
Use these tools for the numbers behind this guide.