Buying a home in Australia has never been cheap, and the deposit hurdle stops a lot of people from getting started. The Australian Government's Help to Buy scheme is designed to change that. If you meet the eligibility criteria, you could buy a home with as little as a 2% deposit and no lenders mortgage insurance (LMI), with the government contributing up to 40% of the purchase price.

Here is what the Help to Buy scheme actually involves, who it is for, and what to think about before you apply.

What is the Help to Buy scheme?

Help to Buy is a shared equity program. When you buy a home under the scheme, the Australian Government takes an equity stake in your property in exchange for contributing part of the purchase price. For new homes, the government can contribute up to 40% of the purchase price. For existing homes, the contribution is up to 30%.

You do not pay rent on the government's share. But when you sell the home or refinance out of the scheme, you repay the government's equity contribution based on the property's value at that time. If the property has gone up in value, the government's share goes up with it.

The scheme is administered through Housing Australia, with applications processed through participating lenders. Commonwealth Bank and Bank Australia are the initial approved lenders, with more expected to join over the course of 2026.

Who is eligible?

Help to Buy is not limited to first home buyers, but you must not currently own any property in Australia or overseas. To qualify, you need to meet these conditions:

  • Your annual taxable income must be $100,000 or less for a single applicant
  • For joint applicants or single parents, the combined income limit is $160,000
  • You must be an Australian citizen
  • You must plan to live in the property as your principal place of residence
  • You must have at least a 2% deposit saved

The scheme is available for 10,000 places per year. It is not unlimited, so timing your application matters.

What does the 2% deposit actually mean?

Under a standard home loan, you would typically need a 20% deposit to avoid paying LMI, or at least 5% to access most other government schemes like the First Home Guarantee. Help to Buy reduces that to just 2%.

On a $700,000 home, a 2% deposit is $14,000 compared to $140,000 for a 20% deposit. That is a significant difference for anyone who has been saving but struggling to close the gap while also paying rent.

Because the government holds an equity share, the bank is lending against a smaller portion of the property. That reduces the lender's risk, which is why LMI is waived.

What are the property price caps?

There are purchase price limits in place, which vary by state and territory. These caps are designed to keep the scheme focused on modest homes rather than premium properties. The limits are updated periodically, so check the current figures at Housing Australia's website or speak to a participating lender for the latest numbers in your area.

What are the trade-offs?

Help to Buy gets you into the market sooner, but it is worth understanding the full picture before you apply.

You do not fully own the property. The government holds an equity share. You cannot rent the property out, and any changes to the home may require consent from Housing Australia.

You share in price growth with the government. If the property increases in value, the government's share is worth more when you sell or refinance. The upside of growth is not entirely yours.

You will need to repay the equity contribution eventually. Whether you sell or buy out the government's share over time, the money does need to come back. Planning for that exit is important.

Lender choice is limited. Only approved lenders can offer Help to Buy loans. That may restrict your rate options compared to the open market.

Is Help to Buy right for you?

Help to Buy suits buyers who have a stable income, meet the eligibility criteria, and have a deposit saved but cannot reach the 20% mark. If your income is below the threshold and you have been locked out of the market by the deposit requirement, this scheme is genuinely worth exploring.

It is also worth comparing Help to Buy against the First Home Guarantee scheme, which lets you buy with a 5% deposit without a government equity share. The right option depends on your deposit size, the property you are looking at, and whether you are comfortable sharing equity with the government.

A broker can walk you through both options side by side and help you work out which one makes sense for your situation. Book a free call with Matt or Jess and we will run through the numbers with you, no obligation.