Housing · Shared equity · First home buyers
Help to Buy launches in December 2025: what it means for Australian buyers
The Australian Government’s Help to Buy shared equity scheme opens to applicants on 5 December 2025. The program aims to support up to 40,000 households over four years by taking an equity stake in a home so eligible buyers can purchase with as little as a 2% deposit instead of the usual 20% deposit required by many lenders.
Under Help to Buy the Commonwealth can contribute up to 40% of the price for a new home or 30% for an existing home in exchange for a share of the property’s equity. You do not pay rent on the government’s share, but you do share future gains and losses in the property value and at some point that stake needs to be repaid.
Deposit
From 2%
Minimum buyer deposit, with no lenders mortgage insurance where scheme rules are met.
Government equity
Up to 30–40%
Up to 30% for existing homes or 40% for new builds, held as a shared equity interest.
Places
10,000 per year
Capped at 10,000 spots annually for four years, so competition for places is expected.
This article is general information only, not personal financial advice. Always confirm current details on official government and lender websites or speak with a licensed adviser before you act.
1. How the Help to Buy shared equity structure works
Help to Buy is a shared equity program. That means you and the Commonwealth government co-own the property in agreed percentages. You are the registered owner and you live in the home, but the government holds an equity interest that changes in dollar value as the market value of the property moves.
Core design features
- Government equity stake: up to 30% of the purchase price for an existing home or up to 40% for a new dwelling.
- Minimum deposit: as low as 2% of the purchase price from the buyer, which means saving a deposit can be significantly faster than saving 20%.
- No lenders mortgage insurance (LMI): in most cases participants do not pay LMI because the combined government equity and buyer deposit reduce the loan-to-value ratio for the lender.
- Shared gains and losses: if the property value rises the government’s equity stake increases in dollar terms. If the value falls the government shares that loss.
- Flexible repayment of the equity: you can usually repay the government stake gradually through voluntary contributions when your finances allow or in full when you sell or refinance.
Day to day, your mortgage works like a conventional home loan. You make repayments to the participating lender on the portion you borrow. The shared equity piece sits in the background and is settled later when you sell or buy out the government’s share.
Worked example (simplified)
Suppose you buy an $800,000 existing home under Help to Buy:
- You contribute a 2% deposit of $16,000.
- The government provides a 30% equity contribution of $240,000.
- You borrow the remaining $544,000 from a participating lender.
Compared with borrowing 80% of the property value without government equity, your loan balance is lower so your repayments are lower. The trade-off is that the government receives 30% of the sale price when you sell unless you have bought out that stake earlier.
Figures are rounded and for illustration only. They do not include stamp duty, fees, state-based grants or any lender specific policy.
2. Who can apply for Help to Buy?
Help to Buy is targeted at low and middle income buyers who would struggle to save a full 20% deposit but have the capacity to service a reasonable home loan. Eligibility criteria are set out in legislation and scheme rules and may change over time, so always confirm the latest requirements on the official program website.
Key eligibility settings at launch
- Citizenship: you must be an Australian citizen. Permanent residents are not currently included.
- Income caps: generally up to $100,000 taxable income for a single and $160,000 for a couple or eligible single parent.
- Property type: owner occupied house, townhouse, duplex or apartment, subject to scheme rules and lender policy. Investors are excluded.
- Property price caps: the maximum eligible price depends on location. At launch, caps range up to around $1.3 million in parts of Sydney and major NSW regional centres with lower caps in other cities and regions.
- Occupancy: you must live in the property as your home and cannot usually rent it out long term.
- Places are limited: there are 10,000 spots per year nationally for four years so demand is expected to be strong in larger cities.
Applications are made through participating lenders that have partnered with the government for the scheme. At launch this includes major banks and selected regional lenders, with the lender panel expected to expand over time.
Check the fine print carefully
Each lender still runs its own credit assessment. Meeting the Help to Buy eligibility rules does not guarantee loan approval, and different lenders may view your income, existing debts and spending patterns differently.
3. Pros and cons to weigh up before you apply
For many households the biggest barrier to buying a home is the time it takes to save a 20% deposit while paying rent and covering rising living costs. Help to Buy directly targets that challenge, but shared equity is not automatically the right choice for everyone.
Potential advantages
- Buy with a 2% deposit instead of saving 10–20%.
- Avoid or reduce lenders mortgage insurance which can cost many thousands of dollars.
- Lower loan size can mean lower repayments than an equivalent purchase without shared equity.
- Government shares downside risk if property values fall during the period when it holds an equity stake.
- Ability to buy back equity gradually over time if your income grows or you refinance.
Important trade offs and risks
- The government receives the same percentage of your sale price as it originally contributed, so you share your capital gains.
- If your income rises above the scheme thresholds you may be required to buy out the government’s stake, which can be a significant cost.
- You remain responsible for all rates, insurance, repairs and maintenance on the property.
- Places are limited and concentrated in certain price bands, so suitable homes within the caps may be scarce in some suburbs.
- Selling or refinancing can be more complex than a standard mortgage because of the equity calculations and scheme rules.
A key question is whether the benefits of entering the market sooner with a smaller deposit outweigh the long term cost of sharing capital gains and navigating the equity repayment. The answer is different for each household’s income, savings profile and housing goals.
4. How Help to Buy sits alongside other schemes and interest rates
Help to Buy launches into a market where the Reserve Bank of Australia has held the cash rate at 3.60% through the second half of 2025 after earlier rate cuts, and lenders are adjusting fixed and variable home loan offers in response. The RBA continues to warn that future moves will depend on inflation, wages and global conditions, so borrowers should plan for the possibility that rates may move over the life of their loan.
The scheme also sits alongside other initiatives such as the Home Guarantee programs that allow some first home buyers to purchase with a 5% deposit under a government guarantee arrangement. Some borrowers will be eligible for both types of support, but the structures are different. One provides a guarantee, the other provides an equity stake.
Questions to ask before you decide
- Based on realistic assumptions about interest rates and your income, can you comfortably service the loan amount without stretching your budget?
- Would you prefer to keep 100% of future capital gains by saving a larger deposit even if that means renting for longer?
- Are there suitable homes within the price caps in the areas where you actually want to live?
- Do you understand the scenarios where you might need to repay the equity early, for example if your income rises above the threshold?
- Have you compared Help to Buy with alternatives such as state grants, stamp duty concessions or low deposit loans backed by a guarantee?
A conversation with a licensed mortgage broker or financial adviser who understands the scheme rules and your financial position can help you compare options. You should always verify details on official government sites and lender disclosures because policies can change and individual circumstances vary.
5. Practical next steps if you are considering Help to Buy
If Help to Buy looks like a potential fit for you, a structured approach will reduce the risk of rushed decisions driven by headlines or fear of missing out.
- Use an online borrowing capacity calculator as a rough starting point, then compare that with what you are actually comfortable paying each month after your regular expenses.
- Check the official Help to Buy site and Housing Australia information for the current rules, eligibility criteria and price caps in your postcode.
- Build a simple three year budget that includes repayments, rates, insurance, utilities and a buffer for repairs so you can see how home ownership would affect your cash flow.
- Speak with a participating lender or broker about how Help to Buy compares with other pathways for you specifically.
- Take your time to assess property options within your budget instead of chasing every listing at the top of the price cap.
Help to Buy will be a powerful tool for some Australians who have stable incomes but limited savings. For others, the obligations that come with shared equity will not match their long term plans. Taking the time now to understand the mechanics, the risks and the alternatives will put you in a stronger position whether you apply for the scheme or not.
This guide is based on information available at the time of writing. Always rely on the current program rules, legislation and lender documentation, and seek personalised advice where needed.
This article is general information only and does not constitute financial, investment, legal, or tax advice. It does not consider your objectives, financial situation, or needs. You may wish to seek personalised advice from a licensed professional before making financial decisions.