The short version: Help to Buy is a shared-equity scheme. The government takes up to a 30% stake in an existing home (40% for a new build), so you can buy with as little as a 2% deposit and a smaller loan. In return, it co-owns that share, and you repay it later based on what the home is worth then.
Most first home buyers I work with hit the same two hurdles: the deposit, and how much a lender will lend. Help to Buy tackles both at once. Instead of guaranteeing your loan, the government buys a slice of the home alongside you, which shrinks both the deposit you need and the mortgage you carry. It works differently to the other first-home supports, and it comes with a real trade-off that I always walk clients through.
How Help to Buy works
Help to Buy is a shared-equity scheme run through Housing Australia. You bring a deposit of as little as 2%, the government contributes up to 30% of the price (40% for a new build), and a normal home loan covers the rest. Because the government's share cuts the amount you borrow, your loan and repayments are smaller than a standard purchase. You own the home and live in it as normal; the government simply holds its share until you repay it.
- Up to 30% government contribution for an existing home, or 40% for a new build
- A minimum deposit of just 2%
- 10,000 places available each financial year
The scheme opened on 5 December 2025. Seven lenders offer it so far: Bank Australia, Commonwealth Bank, Queensland Country Bank, and four banks in the Teachers Mutual Bank group (Teachers Mutual Bank, Health Professionals Bank, Firefighters Mutual Bank and UniBank). The list can change, so check the government's participating lenders page for the latest. You apply through a lender rather than directly to Housing Australia.
Here's the kind of example I run for clients: a $700,000 first home in NSW, where a home at this price also attracts no stamp duty:
| On a $700,000 first home (NSW) | Amount |
|---|---|
| Purchase price | $700,000 |
| Government contribution (Help to Buy, 30% of an existing home) | $210,000 |
| Deposit you need (just 2%) | $14,000 |
| Your home loan (the balance) | $476,000 |
| Stamp duty (NSW first home buyer exemption) | $0 |
| Monthly repayment (principal & interest) | $2,915 |
Monthly repayment assumes a 6.2% interest rate over a 30-year principal and interest loan. Figures are illustrative (a new build would allow up to 40%, and thresholds differ by state); I confirm your real numbers first.
The two supports stack: the government's 30% share and your 2% deposit bring the loan down to $476,000, and a first home under the NSW $800,000 threshold pays no stamp duty, usually the biggest upfront cost after the deposit.
How do you pay the contract deposit with only 2%?
Help to Buy lets you buy with a 2% deposit, but the deposit a vendor asks for when contracts are exchanged is usually much more than that. With my Help to Buy clients, this gap between their 2% and what a standard contract asks for in their state is the biggest sticking point.
In New South Wales, for example, the standard deposit is 10%. If you're only funding 2%, there's a shortfall that has to be bridged, either during the negotiation or when the contract is signed, usually by the vendor accepting a deposit bond in place of a cash deposit.
A deposit bond is a guarantee that stands in for the cash deposit until settlement, and the vendor has to agree to accept one. That's why I tell Help to Buy clients to raise it with the agent or vendor early: say you're using the Help to Buy scheme, and explain how you intend to fund the deposit and bridge that gap. Have that conversation before you make an offer, not on the day you sign.
Are you eligible?
Help to Buy has tighter eligibility than the 5% Deposit Scheme. You must be an Australian citizen, at least 18, buying a home to live in, and you can't currently own any property here or overseas (with limited exceptions for single parents).
Income caps and property price caps also apply. For 2026-27 the income cap is $103,000 for singles and $165,000 for couples and single parents, and price caps vary by location. These settings change, so I check your eligibility against the current rules before we go any further.
The trade-off: you share the upside
The government's share is equity, not a grant or ordinary debt. When you repay it, you pay back its percentage of the home's value at that time, not the dollars it first put in. So if your home grows in value, the government's share grows too, and you hand back more than it contributed (if prices fall, its share falls with them). You're trading some of your future capital growth for an easier way in today, and it's the part I make sure clients understand before they commit.
You don't have to keep the government as a co-owner forever. You can buy the share down over time with voluntary repayments, or settle it when you sell, with each repayment priced on the home's value at the time. Doing it earlier means sharing less of your growth.
Help to Buy vs the 5% Deposit Scheme
Both schemes cut the deposit you need, but they work very differently:
- The 5% Deposit Scheme keeps you as sole owner: the government only guarantees part of your loan so you skip LMI, and you keep all the growth. No income caps, no place limit.
- Help to Buy makes the government a part-owner: a smaller deposit and loan, but you share the growth, income caps apply, and places are capped at 10,000 a year.
Which one fits depends on your deposit, your income and how you feel about sharing the upside, and for some of the buyers I see, neither is the right move.
Where to next
Help to Buy can be the difference between buying now and waiting years, but the shared-equity trade-off is worth thinking through. If you'd like to work out whether Help to Buy, the 5% Deposit Scheme or the First Home Super Saver scheme fits your situation, book a free discovery call and I'll run the numbers with you.
Frequently asked questions
How much does the government contribute under Help to Buy?
Up to 30% of the price for an existing home, or 40% for a new build. It's an equity share, so the government co-owns that percentage until you repay it.
How much deposit do I need for Help to Buy?
A minimum of 2%. Because the government contributes a large share on top, your loan is smaller, which is what makes the low deposit workable.
Do I have to repay the government's share?
Yes, when you sell or earlier through voluntary repayments. The amount is based on the property's value at the time you repay, so if the home has grown, you pay back more than the government first put in.
Can I use Help to Buy if I've owned a home before?
Generally no: you can't currently own any property in Australia or overseas, with limited exceptions such as a single parent buying out a former partner. It's owner-occupier only, not for investment.
Will a vendor accept a 2% deposit when I sign the contract?
Not automatically. A standard contract usually asks for a bigger deposit than 2% (in NSW it's commonly 10%), so the gap has to be bridged, often by the vendor agreeing to accept a deposit bond instead of cash. Tell the agent early that you're using Help to Buy and how you'll fund the deposit.
What are the income limits for Help to Buy?
For 2026-27, $103,000 for singles and $165,000 for couples and single parents, based on your latest ATO notice of assessment. The thresholds are reviewed over time, so I check the current figures with you.
Official details, including current price caps and the up-to-date list of participating lenders, are on the Australian Government Help to Buy Scheme website.
Last updated: October 2026
This article is general information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, financial or tax advice. Figures are indicative estimates that vary by lender, state and property and can change, so we confirm your real numbers before you act. For tax questions, speak to a registered tax agent or accountant. Scott Lung, credit representative 567904 of Purple Circle Financial Services Pty Ltd (Australian Credit Licence 486112).
5 finance decisions to get right before buying your first investment property
- Build your first investment with a long-term property strategy.
- Understand the finance decisions that shape your borrowing power and future options.
- Make smarter decisions around your deposit, cash flow and loan structure before you sign a contract.
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