Help to Buy Scheme: Shared Equity for First Home Buyers

What is the Help to Buy scheme?

Help to Buy is a shared equity loan where:

You provide your deposit (typically 5–10%)
You get a traditional mortgage from a lender (for the majority)
The government contributes an equity share (typically 5–20% of the property value)
You own the property and pay repayments on the bank loan; the government's equity is a passive investment

Result: You own a home sooner with a lower mortgage and lower repayments, while the government shares the long-term property growth.

How Help to Buy works

Step 1

Check eligibility

First home buyer, meet income and property value caps, and Australian citizen or permanent resident.

Step 2

Apply for Help to Buy

Submit an expression of interest or application through the participating state scheme (state-based).

Step 3

Find a property

Once approved, you have a timeframe to identify and make an offer on an eligible property.

Step 4

Settle with equity

At settlement, the government's equity share is registered against the property deed; you proceed with your bank loan.

Key features

Lower deposit required

With government equity backing, many buyers only need 5–10% deposit instead of 20%, freeing up savings.

Lower mortgage amount

The government's equity reduces the amount you need to borrow, resulting in lower monthly repayments.

No LMI

Because the government is investing equity alongside you, Mortgage Insurance isn't required.

Shared growth

When you sell or refinance, the government's equity share is adjusted based on the property's appreciation or depreciation.

Who is eligible?

First home buyer: Haven't owned residential property in Australia in the past 12 months
Maximum household income: Usually $120,000–$180,000 (varies by state and year)
Australian citizen or permanent resident
Maximum property purchase price: Varies by state and location (typically $450,000–$800,000)
Primary residence only: Must be your main place of residence, not investment property

Example: Help to Buy scenario

$500,000 property

Your deposit: $50,000 (10%)
Bank loan: $350,000 (70%)
Government equity: $100,000 (20%)
Your ownership: 80% (you + bank loan portion)
Monthly repayment: Lower than traditional mortgage on $450,000 (what you'd borrow without Help to Buy)

What happens when you sell?

When you sell the property or refinance:

The sale proceeds are used to pay off your bank loan first
The government receives their equity share based on the final sale price
If property appreciated: Government shares in the growth (they receive more than their initial investment)
If property depreciated: Government shares the loss (they receive less)
You keep any remaining proceeds after both loans are settled

Important considerations

Long-term cost

While Help to Buy reduces your initial mortgage, the government keeps a stake in the property. When you eventually sell, they take their share of the appreciated value. Compare long-term wealth outcomes with traditional mortgages.

State-specific schemes

Help to Buy terms, equity percentages and availability vary significantly by state. NSW, Victoria, Queensland and other states have different programs with different rules.

Refinancing limitations

Some lenders have restrictions on refinancing properties with government equity. Check with your bank before committing.

Is Help to Buy right for you?

Help to Buy suits buyers who:

Want to buy sooner rather than save for a larger deposit
Prefer lower repayments to manage other expenses
Are comfortable with the government keeping a stake in the property
Meet income and property value eligibility criteria

Should you consider Help to Buy?

CredQ can compare Help to Buy, Home Guarantee Scheme, and traditional mortgages. Let's model each option and find the best fit.

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Help to Buy Scheme: Shared Equity Explained