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That God gives us salvation not because we have done anything to deserve it but entirely due to unmerited favour He shows us is the foundation of the new covenant which He established through Jesus (Ep.2:8,9). This covenant replaced the earlier covenant made through the Law (which is now called the oldcovenant) under which God rewarded people according to how they obeyed His commandments (De.28:1,15). Under the old covenant one had to earn blessings by one's obedience. But God knew all the time that no man could really manage to earn his salvation because of the weakness of the flesh (Ro.3:20), and when He gave the old covenant He was only waiting for people to recognise and acknowledge their weakness and inability before He offered them the new covenant.

We know what it is to try to please God by trying to be good, doing good things, etc. We realise after some time that it is impossible because we always come short of the requirements of God's law. If we managed to keep the Law in some part, we failed in another. But when we came to that awareness of helplessness, we were glad to be offered the new covenant of grace, that God was willing to accept us in whatever condition we were in, because His Son Jesus had taken the punishment for our sins and met the righteous requirements of the Law on our behalf (Ro.8:3). We understand that we are already pleasing to God because we have believed and accepted what He was offering us through Jesus (cf.Jn.3:18). We now learn to live in a way that is pleasing to Him (2Co.5:9), not to gain our salvation but out of joy of having been saved.

Some Christians who look at the words of the Bible merely literally and do not look beyond the words to God's heart revealed in those words get into confusion thinking that we are not to do any 'works' at all because our salvation is by grace alone. They interpret 'grace' as something so entirely on God's part that anything man does is considered as works. Some of them even look at repentance and faith as works. That is silly. When God offers us this salvation our faith is just our confidence in Him and our believing in what He has done for us. It is clear that only if we believe in Him we will stretch out our hands and receive what He is offering to us. We could refuse to believe, and so it is our faith that will determine whether we receive this salvation or not. It is not that we earn our salvation through faith, but it is the means through which we receive this salvation that is offered to us as an unmerited favour (Ep.2:8).

When we hear the Gospel it is our realisation that we are sinners and we need a Saviour that draws our heart to Jesus and His Gospel. Our repentance is a part of our response to this conviction that the Holy Spirit works in our heart when we hear the gospel (Ac.11:18). It then leads us to faith. It should be clear that repentance and faith do not earn our salvation but our response to the offer of salvation.