The Help to Buy scheme Australia has officially launched, giving eligible Australians the chance to buy a home with as little as a 2% deposit. For many first home buyers and people returning to the property market, this government shared equity scheme could significantly shorten the time it takes to get into home ownership.
Instead of needing years to save a large deposit, the Help to Buy scheme allows the federal government to contribute up to 40% of a new home’s value or 30% of an existing home, reducing the size of your mortgage and your ongoing repayments.
But while the Help to Buy scheme Australia offers major benefits, it also comes with important trade-offs that buyers need to understand before applying. In this guide, we break down how Help to Buy works, who is eligible, the pros and cons, and whether it’s the right option for you.
What Is the Help to Buy Scheme Australia?
The Help to Buy scheme Australia is a federal government shared equity home ownership program designed to help eligible buyers purchase a home sooner with a much smaller deposit.
Unlike other first home buyer grant:
- It is not a cash grant like the First Home Owner Grant
- It is not just a loan guarantee like the 5% Deposit Scheme
Instead, Help to Buy is a shared equity scheme.
How the Help to Buy Scheme Works
Under the Help to Buy scheme:
- Buyers contribute a minimum 2% deposit
- The government contributes:
- Up to 40% for new homes
- Up to 30% for existing homes
- The buyer takes out a smaller home loan for the remaining amount
- No interest or rent is charged on the government’s share
Help to Buy Scheme Example
Let’s look at a real-world example of how the Help to Buy scheme Australia works.
Olivia is a first home buyer purchasing an existing home for $600,000.
- Olivia pays a 2% deposit: $12,000
- The government contributes 30%: $180,000
- Olivia takes out a home loan for $408,000
Without the Help to Buy scheme, Olivia may have needed a much larger deposit and a bigger mortgage. Instead, the shared equity model makes her loan more manageable and allows her to buy sooner.
Why the Help to Buy Scheme Can Be a Game Changer
The Help to Buy scheme Australia offers two major advantages for eligible buyers.
1. Buy a Home Sooner With a 2% Deposit
Saving a 20% deposit can take many Australians years, especially with rising property prices. Even a 5% deposit can be challenging.
With Help to Buy:
- The deposit requirement drops to just 2%
- Buyers may enter the market years earlier
- Less time spent renting and saving
2. Smaller Mortgage, Lower Repayments
Because the government contributes up to 40% of the purchase price:
- Your loan size is smaller
- Monthly repayments are generally lower
- Borrowing power may improve
This can make home ownership more sustainable over the long term.
Who Is Eligible for the Help to Buy Scheme Australia?
While the Help to Buy scheme Australia is primarily aimed at first home buyers, it is also open to people returning to home ownership.
Basic Eligibility Criteria
To qualify, buyers must:
- Be an Australian citizen
- Have at least a 2% deposit
- Meet income caps:
- Singles: up to $100,000 per year
- Couples or single parents: up to $160,000 combined
- Live in the property as their principal place of residence
Property Price Caps
There are also property value caps under the Help to Buy scheme, which vary depending on:
- State or territory
- Capital city vs regional area
These caps are designed to keep the scheme focused on affordable housing.
👉 Talk to us to check if your income and target property fit the Help to Buy limits.
What Are the Pros and Cons of the Help to Buy Scheme Australia?
Like any government scheme, Help to Buy has benefits and drawbacks.
Advantages of the Help to Buy Scheme
- Buy with as little as 2% deposit
- No lenders mortgage insurance (LMI)
- Smaller home loan and repayments
- No interest or rent on the government’s share
- Helps buyers enter the market sooner
Key Downsides to Consider
The biggest consideration is that the government owns a share of your home.
When you repay the government’s contribution:
- You repay the same percentage of the home’s value, not the original dollar amount
- If your property increases in value, the government benefits from that growth
This means:
- You may repay more than the original contribution
- The government shares in capital gains
What Happens When You Sell or Buy Out the Government’s Share?
Homeowners can repay the government’s equity stake by:
- Making voluntary repayments
- Selling the property
- Refinancing and buying out the share later
However, repayments are based on the current market value, not the original purchase price.
This is a crucial point to understand before committing to the Help to Buy scheme Australia.
Renovations Under the Help to Buy Scheme
Renovating a home under the Help to Buy scheme can be more complex.
For major renovations:
- Housing Australia arranges a valuation before and after
- This ensures the homeowner keeps the value added by renovations
- But it does add extra steps and administration
Limited Lender Participation (For Now)
At launch, only a small number of lenders are participating in the Help to Buy scheme Australia. More lenders are expected to join from early 2026, which may improve choice and competitiveness.
Is the Help to Buy Scheme Australia Worth It?
The Help to Buy scheme Australia won’t suit everyone, but it could be ideal if:
- You struggle to save a large deposit
- You want lower monthly repayments
- You’re comfortable sharing future capital growth
- You plan to live in the property long-term
It’s especially valuable for buyers locked out of the market due to deposit constraints rather than income.
The Help to Buy scheme Australia is limited to 10,000 places per year, making early advice and preparation essential.
If you’re a first home buyer or returning to the property market, speak with a mortgage broker to:
- Check your eligibility
- Compare Help to Buy with other schemes
- Understand the long-term impact on your finances
Get expert guidance before you commit the right advice can save you thousands.
Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
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