The Australian Government's Help to Buy scheme is now live, offering one of the most generous homeownership programs ever seen in Australia. Eligible buyers can purchase a home with as little as a 2% deposit, with the government contributing up to 40% of the purchase price for new homes and 30% for existing homes. Here's everything you need to know.
What Is the Help to Buy Scheme?
Help to Buy is a shared equity scheme where the Australian Government contributes a portion of the purchase price of your home. You own the home outright and live in it, but the government holds an equity share that you repay later - either when you sell, or over time as your finances allow.
How It Works - At a Glance
- Minimum deposit: Just 2% of the purchase price
- Government contribution: Up to 40% for new builds, 30% for existing homes
- Your mortgage: Covers the remaining balance (as low as 58%)
- No LMI required: Despite the tiny deposit
- No rent on government share: You don't pay anything on their equity portion
Real Example: How Much Could You Save?
Let's look at a practical example for a $800,000 home purchase in Western Sydney:
Help to Buy vs Traditional Purchase
| Help to Buy (New) | Traditional (20%) | Traditional (5%) | |
|---|---|---|---|
| Purchase price | $800,000 | $800,000 | $800,000 |
| Your deposit | $16,000 (2%) | $160,000 (20%) | $40,000 (5%) |
| Gov. contribution | $320,000 (40%) | Nil | Nil |
| Your mortgage | $464,000 | $640,000 | $760,000 |
| LMI cost | $0 | $0 | ~$18,000 |
| Monthly repayment* | $2,950 | $4,065 | $4,830 |
*Based on 6.44% variable rate over 30 years. Monthly savings compared to 5% deposit: $1,880/month.
Who Is Eligible?
The Help to Buy scheme has specific eligibility requirements:
Income Requirements
- Singles: Taxable income up to $90,000 per year
- Couples: Combined taxable income up to $120,000 per year
Other Eligibility Criteria
- Must be an Australian citizen aged 18 or over
- Must not currently own property in Australia (or have owned in the past)
- Must live in the property as your principal place of residence
- Must have a minimum 2% deposit saved (genuine savings)
- Must be able to service a mortgage for your share of the purchase
Important: Income Is Assessed on Taxable Income
Your taxable income (not gross income) is what counts. Salary sacrifice, superannuation contributions, and legitimate deductions can bring your taxable income under the threshold.
Property Price Caps by Location
The scheme has maximum property price limits that vary by location:
NSW Property Price Caps
| Location | Price Cap |
|---|---|
| Sydney | $950,000 |
| Newcastle & Lake Macquarie | $750,000 |
| Illawarra | $750,000 |
| Regional NSW | $550,000 |
Other Capital Cities
| Location | Price Cap |
|---|---|
| Melbourne | $850,000 |
| Brisbane | $700,000 |
| Perth | $600,000 |
| Adelaide | $600,000 |
Help to Buy vs First Home Guarantee
Both schemes help first home buyers get into the market sooner, but they work very differently:
Scheme Comparison
| Help to Buy | First Home Guarantee | |
|---|---|---|
| Minimum deposit | 2% | 5% |
| Government role | Equity partner (owns share) | Guarantor (no ownership) |
| Income cap | $90k single / $120k couple | No cap (from 2026) |
| Property price caps | $550k-$950k (varies) | No cap (from 2026) |
| Your mortgage size | 58-68% of price | 95% of price |
| Monthly repayments | Much lower | Higher (full loan) |
| Repay government? | Yes (equity share on sale) | No |
| Best for | Lower income earners | Higher income earners with small deposit |
How the Government Equity Share Works
The government's contribution isn't a loan - it's an equity share. This means:
- No interest or rent charged on the government's share
- When you sell, the government receives their percentage of the sale price
- If property value rises, the government's dollar amount rises too
- You can buy back the government's share over time (minimum 5% increments)
- You keep 100% of the capital gains on your share
Example: Selling After 10 Years
You buy a new home for $800,000 with a 40% government share ($320,000).
After 10 years, the property is worth $1,100,000.
- Government receives: 40% of $1,100,000 = $440,000
- You receive: 60% of $1,100,000 = $660,000 (minus your remaining mortgage)
You still benefit from $180,000 in capital growth on your 60% share.
Which Lenders Offer Help to Buy?
The scheme launched with a limited number of participating lenders:
- Commonwealth Bank (CBA) - available now
- Bank Australia - available now
- More lenders expected to join throughout 2026
A mortgage broker can help you access the best rates from participating lenders and manage the application process.
How to Apply
The application process involves several steps:
Step 1: Check Your Eligibility
Confirm your income, citizenship, and property ownership status meet the criteria. A mortgage broker can do a quick assessment.
Step 2: Get Pre-Approved
Apply for mortgage pre-approval through a participating lender. Your broker will handle the Help to Buy application alongside your home loan.
Step 3: Find Your Property
Search for a property within the price cap for your area. The property must be suitable as your principal place of residence.
Step 4: Complete the Purchase
Your broker and solicitor will coordinate the Help to Buy shared equity arrangement as part of your settlement.
Things to Consider Before Applying
- Property price caps may limit your options - $950,000 in Sydney still excludes many areas
- You share capital growth with the government - this is the trade-off for the lower deposit and repayments
- Income limits are strict - couples earning over $120k combined don't qualify
- Limited lender choice currently - this may mean fewer competitive rates initially
- You must live in the property - it can't be used as an investment
Find Out If Help to Buy Is Right for You
We'll compare Help to Buy with the First Home Guarantee and other schemes to find the best pathway to homeownership for your situation.
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