Savvy first-time buyers are managing to knock up to €100,000 off what they have to borrow for new homes by combining two State support schemes.

Buyers who avail of both the new First Home shared equity scheme, along with the Help-To-Buy tax refund, are managing to buy €320,000 homes with mortgages of just €240,000.

One commentator said this was acting like “rocket-fuel” to propel people on to the property market. But it may also be fuelling continued rising house prices.

The €400m First Home Scheme was launched last July, and provides funding for first-time buyers, people who have been divorced, those who have been declared insolvent to buy a new home.

It is a shared equity scheme in which the fund pays up to 30pc of the cost a new home in return for a 30pc equity stake.

The average support being provided by First Home is €71,000.

It is available on top of the Help-To-Buy refund administered by Revenue where new buyers can claim up to €30,000 to use to buy a house or apartment.

Using the First Home Scheme in conjunction with the Help-to-Buy tax refund means buyers are lowering their borrowing costs by up to €100,000 when they buy a new home or apartment.

The revelation that the two schemes are being used to knock thousands of euro off what buyers have to shell out comes just months after the Central Bank loosened lending rules to allow first-time buyers borrow up to four times their income. Before January, they could only borrow three-and-a-half times their income.

Economists have argued that existence of the two supports was fuelling house price rises.

Sinn Féin’s Eoin Ó Broin said the two schemes should be scrapped immediately, as they are “fundamentally flawed” and are contributing to house-price inflation.

Mr Ó Broin said government-commissioned reports have shown that a third of those availing of the Help-To-Buy scheme do not need it.

Martina Hennessy, managing director of mortgage brokerage Doddl.ie, said the two support measures were proving a huge boost to first-time buyers of new homes.

She said there was nothing to stop people combining to two schemes to dramatically lower what they have to borrow to buy a new home.

The only stipulation when the two schemes are combined is that the equity stake in the home that the First Home Scheme fund can take drops from a maximum of 30pc to 20pc if the buyers are also availing of the Help-To-Buy scheme.

Ms Hennessy said: “From a mortgage perspective, the Help-to-Buy scheme, First Home Scheme and green rate mortgages, which are some of the lowest on the market, are a welcome boost for first-time buyers trying to purchase a new build home.”

“The obvious issue is the lack of supply versus demand for such homes.”

She said there was a lot of confusion about the First Home shared equity scheme, as some first-time buyers mistakenly think it is only for social or affordable housing schemes. Others mistakenly think it allows the State to part own their homes.

The scheme was devised solely to address private purchasers. There is a separate scheme for social housing run by local authorities.

The scheme is a €400m fund run by First Home Scheme DAC, set up as a special purpose vehicle.

It is backed by AIB, Bank of Ireland and Permanent TSB.

There is a ceiling of €450,000 on house values for Dublin under the First Home Scheme, with a ceiling of €375,000 in most other areas. People have to apply through their local authority.

Help-To-Buy has been used by 62,500 borrowers since 2017, with 21,500 applications pending. It has cost €773m so far, Revenue figures show.