The Australian Government’s proposed shared equity scheme is set to help eligible buyers enter the property market with a smaller deposit.
Owning a home is a dream for many Australians, but saving for a deposit and securing a mortgage can be a significant challenge—especially in today’s market. The Australian Government’s Help to Buy Scheme is designed to ease that burden, allowing eligible buyers to enter the property market sooner with a smaller deposit and reduced loan amount.
In this guide, we’ll break down what the Help to Buy Scheme is, how it works, who’s eligible, and whether it could be the right option for you.
What is the Help to Buy Scheme?
The Help to Buy Scheme is a shared equity program that allows eligible homebuyers to purchase a property with financial assistance from the government. Under this scheme, the government contributes a percentage of the home’s purchase price in exchange for a proportional share of the property.
New Homes: The government contributes up to 40% of the purchase price.
Existing Homes: The government contributes up to 30% of the purchase price.
With a government-backed contribution, buyers can secure a home loan with a deposit as low as 2% without the need to pay Lenders’ Mortgage Insurance (LMI).
But what does this mean in practice? It means smaller mortgage repayments, reduced interest costs, and a faster path to homeownership.
Who is eligible?
The Help to Buy Scheme is designed for Australians who need assistance getting into the property market. To qualify, you must meet the following criteria:
Be an Australian citizen aged 18 or older.
Earn $90,000 or less per year as an individual, or $120,000 or less as a couple.
Have a deposit of at least 2% of the property’s value.
Live in the property—this scheme is not available for investors.
Not currently own any other property in Australia or overseas.
Be able to cover upfront costs, such as stamp duty, legal fees, and ongoing homeownership expenses.
The government has allocated 10,000 spots per year, meaning demand could be high once the scheme officially launches.
How Much Can You Save?
By participating in the Help to Buy Scheme, eligible buyers could save hundreds of thousands of dollars over the life of their loan.
For example:
🏡 If you purchase a new home in Sydney worth $950,000, you could receive a government contribution of up to $380,000. This means you would only need to finance $570,000 through your mortgage, significantly reducing your monthly repayments and interest costs.
💡 Lenders’ Mortgage Insurance (LMI) Savings: Because the government’s contribution acts as part of your deposit, you won’t need to pay LMI—even with a deposit as low as 2%.
📉 Lower Loan Repayments: A smaller loan amount means lower monthly repayments, freeing up your cash flow for other expenses.
Key Considerations Before Applying
While the Help to Buy Scheme offers excellent benefits, it’s essential to understand the long-term commitment involved:
✔ Government Ownership Share: Since the government contributes a percentage of your home’s value, it retains an equivalent share in the property. If you sell or refinance, you’ll need to repay the government’s contribution based on the home’s value at that time.
✔ Increasing Your Share Over Time: If your financial situation improves, you can gradually buy back more of the government’s share, increasing your ownership percentage. The minimum additional purchase is 5% at a time.
✔ Income Thresholds Apply: If your income exceeds the scheme’s limits for two consecutive years, you may be required to repay the government’s contribution partially or in full.
✔ Ongoing Costs Are Your Responsibility: You’ll still be responsible for mortgage repayments, council rates, utilities, maintenance, and other homeownership expenses.
Is the Help to Buy Scheme right for you?
This scheme is ideal for:
🔹 First-home buyers who are struggling to save a large deposit.
🔹 Individuals or couples who meet the income criteria and want to reduce their mortgage repayments.
🔹 Those who are comfortable with the government owning a percentage of their home.
However, if you prefer to own 100% of your property from the start or expect a significant income increase in the near future, other financing options might be more suitable.
How Fync can help.
Navigating government schemes and mortgage options can be overwhelming. That’s where Fync comes in. We specialise in helping first-home buyers find the best homeownership path—whether through the Help to Buy Scheme, First Home Guarantee, or other available grants.
💬 Book a consultation with Fync today, and let’s explore how we can get you into your first home sooner.
Final Thoughts.
The Help to Buy Scheme is a unique opportunity for eligible Australians to enter the property market with a lower deposit and reduced loan burden. However, it’s essential to understand the long-term financial implications before making a decision.
If you’re considering applying, speak with a mortgage expert at Fync to explore your options and determine the best strategy for your homeownership journey.
Note: This information is current as of February 2025. For the most up-to-date details, consult official government resources or a qualified mortgage broker.
*Disclaimer: Please note that the information provided in this communication is for general informational purposes only and should not be construed as professional advice. It is not intended to substitute for personalised financial, legal, or tax advice. Please consult a qualified professional before making any decisions based on the information provided.