Help to Buy: how shared equity affects purchase costs

Help to Buy is an Australian Government shared equity scheme administered by Housing Australia. The government contributes part of the purchase price in return for a proportional interest in the home, so the buyer needs a smaller deposit and a smaller loan. According to Housing Australia, as at September 2026 the contribution is up to 30 per cent of the price of an existing home or up to 40 per cent of a new home, the minimum deposit is 2 per cent, and no rent or interest is charged on the government's share.

The trade-off is that the government's interest is a percentage of the home's value, not a fixed debt. When the home is sold or the share is bought back, the amount repaid rises or falls with the property's value. Lower costs at purchase are exchanged for a share of any future capital gain.

Current status of Help to Buy

The scheme is open. The Australian Government's First Home Buyers website states that applications opened on 5 December 2025, and Treasury describes a program of 40,000 places, with up to 10,000 available each year. The Help to Buy customer guide and fact sheet were reissued on 1 July 2026, and the income thresholds were indexed from that date.

On participating jurisdictions, the sources differ slightly in wording. The First Home Buyers website lists the scheme as available in all states and territories and publishes price caps for every state and territory. Treasury's summary page refers to the scheme opening in participating states, being those that have passed supporting legislation, and in the territories. A participating lender can confirm availability for a particular location.

Applications cannot be made directly to Housing Australia. They are made through a participating lender, and as at September 2026 the First Home Buyers website lists six: Bank Australia, Commonwealth Bank, Teachers Mutual Bank, Health Professionals Bank, Firefighters Mutual Bank and UniBank. This is a much smaller panel than the wider home loan market shown on the banks page.

How shared equity works and the government's share

Housing Australia describes the contribution as an equity contribution secured by an interest-free loan and a second mortgage. The buyer is the sole registered owner and lives in the home, while the government holds a contractual financial interest recorded on the title.

• The contribution is between 5 and 30 per cent of the price for an existing home, and between 5 and 40 per cent for a new home.
• The buyer does not choose the percentage freely. The customer guide states that the buyer must contribute the maximum they can afford, based on the lender's financial capacity assessment, and that the government contributes as much as is necessary to complete the purchase and avoid lenders mortgage insurance, up to the maximum.
• A person who could buy the home using their own savings, assets and borrowing capacity is not eligible.

Eligibility, income thresholds and price caps

According to the Housing Australia fact sheet dated 1 July 2026, applicants must be Australian citizens aged 18 or over, must live in the home as their principal place of residence, and must not own any property in Australia or overseas, with limited exceptions for single parents. For 1 July 2026 to 30 June 2027, annual taxable income on the previous year's ATO notice of assessment must be at or below $103,000 for an individual, or $165,000 for joint applicants and single parents. These thresholds are indexed each 1 July.

The purchase price must not exceed the cap for the location. Housing Australia states that price caps are not indexed and are changed only by government decision.

State or territory	Capital city and regional centres	Other areas
New South Wales	$1,300,000	$800,000
Victoria	$950,000	$650,000
Queensland	$1,000,000	$700,000
Western Australia	$850,000	$600,000
South Australia	$900,000	$500,000
Tasmania	$700,000	$550,000
Australian Capital Territory	$1,000,000	Not applicable
Northern Territory	$600,000	$600,000

These figures are from the Housing Australia fact sheet as at September 2026. Regional centres include Newcastle and Lake Macquarie, the Illawarra, the Central Coast, Geelong, the Gold Coast and the Sunshine Coast. The postcode tool on the First Home Buyers website confirms the cap for a given suburb.

Effect on deposit, LMI and repayments: a worked example

The following example is hypothetical. The interest rate is an assumption for illustration only and is not a current market rate.

A single buyer wishes to purchase an existing home in Brisbane for $700,000 and has $35,000, or 5 per cent, available as a deposit after setting aside purchase costs. The comparison uses a 30 year principal and interest loan at an assumed 6.00 per cent a year.

Item	Without Help to Buy	With a 30% government share
Buyer deposit	$35,000	$35,000
Government contribution	Nil	$210,000
Home loan	$665,000	$455,000
Loan as a share of price	95%	65%
Lenders mortgage insurance	Normally payable	Not required
Illustrative monthly repayment	$3,987	$2,728

The repayment is about $1,259 a month lower in this illustration, and a loan of 95 per cent of the price may not be serviceable on an income within the scheme's threshold. The mortgage repayment calculator can test other rates, and the LMI calculator estimates the insurance premium avoided.

Some costs are not reduced. The customer guide states that the buyer pays transfer duty, legal and conveyancing fees, inspections, valuation fees and the mortgage registration costs for the government's share. Duty is assessed on the full price, which the stamp duty calculator can estimate. Housing Australia confirms that state first home owner grants and duty concessions may still be claimed, as outlined on the government grants page. Other shared equity schemes and government guarantees, including the 5% Deposit Scheme, cannot be used for the same purchase.

Obligations while in the scheme

According to the customer guide, a participant must:

• live in the home as their principal place of residence, and not rent it out or use it for business without an approved exemption;
• keep the home in good condition and hold full replacement building insurance, with proof provided to Housing Australia each year;
• pay council rates, strata levies and other ownership costs;
• keep the home loan with a participating lender, and notify Housing Australia before refinancing, selling or taking further borrowing secured on the home;
• notify Housing Australia before improvements costing $21,000 or more in a 12 month period (a threshold indexed annually) or requiring council approval. With notice and valuations before and after the work, the government's percentage is reduced so that the owner keeps the value added. Without notice, no adjustment is made.

Housing Australia reviews taxable income at least once every five years. If income exceeds the indexed threshold for two consecutive financial years, the participant may be required to repay part or all of the share, depending on financial capacity as assessed by the lender. The guide states that a repayment will not be required where it would force the participant to take out lenders mortgage insurance, and that a further assessment occurs at least 12 months later where a repayment is not affordable.

Buying back the government's share

A participant may buy back the share in full, or in part through lump sums of at least 5 per cent of the home's current value. Each repayment is calculated on a valuation at that time, and the participant pays for the valuation and any administrative costs.

Continuing the hypothetical example, assume the home is later valued at $900,000. The government's 30 per cent share is then worth $270,000, not the original $210,000. The minimum partial repayment is $45,000. A repayment of $90,000 would reduce the government's share from 30 per cent to 20 per cent. If that payment were funded by increasing the home loan, repayments would rise accordingly. The home equity calculator can help estimate the owner's position.

Refinancing is restricted. The guide states that refinancing with a participating lender may include a full or partial buy-back, while moving to a lender outside the panel requires the share to be bought out in full. General information on switching loans is in the refinance section.

What happens when the home is sold

The home may be sold at any time, on an arm's length basis, after notifying the lender and Housing Australia. Housing Australia arranges a valuation at the seller's cost and applies its percentage to the greater of the sale price and the valuation. Proceeds are paid first to the lender, then to Housing Australia, then to any other party with a claim, and the balance goes to the seller.

In the hypothetical example, suppose the home sells for $900,000 after seven years, when the loan balance at the assumed rate would be about $407,859. The lender receives $407,859, Housing Australia receives $270,000, and the seller receives about $222,141 before agent and legal costs. If the home instead sold for $600,000 and the valuation agreed, the government's share would be $180,000, so the loss is also shared. The guide warns that where poor maintenance or unauthorised changes reduce the value, Housing Australia may increase its percentage to protect its share.

Questions to consider before applying

• Whether a guarantee scheme or a longer saving period would achieve the purchase without giving up part of any capital gain.
• Whether the small lender panel offers a suitable loan. The comparison tool shows how rates and fees can differ between lenders.
• Whether rising income is likely to trigger a required buy-back, and how that would be funded.
• Whether insurance, rates and maintenance are affordable alongside repayments.

Housing Australia recommends independent legal and financial advice before signing the participation agreement. This article is general information only, and a licensed adviser can confirm how the scheme applies to an individual.