Starting in 2024, the Albanese Government has announced it will begin to deliver its Help to Buy scheme, offering tens of thousands of low and middle-income earners a leg up to buy their first home.

Eligible participants can move into a home with a deposit as little as 2%.

At a National Cabinet Meeting, Prime Minister Anthony Albanese said the scheme will provide support to those who need it most.

“So often, these Australians have done all the right things - worked hard, saved up, made sacrifices, but a deposit for a home is still out of reach,” Mr Albanese said.

“Our government will step up and assist, opening the door of home ownership to tens of thousands of Australians.”

So how does the Help to Buy scheme work, what are the risks, and can anyone sign up?

How does Help to Buy work?

The Help to Buy scheme is known as a ‘shared equity scheme’ and was initially announced ahead of the 2022 federal election.

Essentially, it means you can co-buy a home with the government offering a helping hand.

Eligible buyers purchasing a home would receive an equity contribution of up to 40% of the cost of a new home, or 30% for existing homes. It can be a house, unit, or townhouse.

Buyers will also have Lenders Mortgage Insurance (LMI) waived, potentially saving thousands of dollars.

Up to 40,000 participants will be added to the scheme over four years and will begin sometime in 2024 (10,000 successful applicants per year). It will be a first come first served basis.

How much could you save?

The government said the scheme could cut the cost of a mortgage by up to $380,000, depending on the price paid.

And while the home buyer will not pay rent or interest on the portion of their house owned by the government, they will have to pay a share of any capital gain made to the government when the property is sold.

The capital gains will be calculated in reference to the size of the government’s equity share in the home.

For example, if the government contributed a 30% share in the home, then it would be entitled to 30% of the proceeds of the sale, which includes 30% of any capital gains made.

Can you buy back the government share?

Yes, buyers can progressively buy-out the government’s stake in the property. You can buy a minimum stake of 5% from the government share at a time.

However, you can only start buying back the government equity after the first two years.

If you were to buy back a 5% share every year (after the first two years are up), you could own the home after eight years - that’s if the government contributed 30%.

Are there any risks to the scheme?

All good things come with a little risk.

If property prices drop, the homebuyer may end up owing the government more than what they borrowed. However, prices would need to drop by 30-40% in order for this to occur.

Who is eligible for the scheme?

To be eligible, you must meet the following requirements:

  • Must be an Australian citizen and at least 18 years of age
  • Yearly income must be $90,000 or less for singles, or $120,000 (combined) or less for couples
  • Must have a minimum 2% deposit
  • Home buyers must qualify for a standard home loan with a participating lender
  • You must live in the purchased home
  • You must not currently own land or property in Australia or overseas, but it doesn’t have to be your first home purchase
  • You must prove you are able to pay for all associated up-front costs e.g. stamp duty, banks fees, legal fees

State price caps

There are limits on how much you can spend on a home in each state (depending on the median house price), so there goes the idea of buying a 3-bed, 2-bath house in Bondi.

State Property price cap
Capital and regional centres Rest of the state
NSW $950,000 $600,000
VIC $850,000 $550,000
QLD $650,000 $500,000
WA $550,000 $400,000
SA $550,000 $400,000
TAS $550,000 $400,000
ACT $600,000 $600,000
NT $550,000 $550,000

What are the benefits of Help to Buy?

  • You can get into the property market sooner with a low deposit
  • LMI is waived
  • The government will not charge any fees or interest, and you will not have to pay interest to the bank on the government’s proportion
  • Home loan amount, and thus repayments, will be less than if the loan balance was for the full equity amount

What are the drawbacks of Help to Buy?

  • The government owns a portion of your home
  • A portion of the capital gains made after selling goes to the government
  • The government is essentially betting on home prices going up - the government was quiet on the policy during house price falls from mid-2022 to 2023
  • The price caps barely cover the median house price in many cities
  • The scheme doesn’t actually address affordability, just accessibility and could fuel further demand
  • How the scheme works with participating lenders is unclear until further information is released

Other government grants/schemes for first home buyers

For some of you, the Help to Buy scheme may not be the right cup of tea - and that’s okay.

There are other government incentives available to those looking to get their foot on the property ladder. They include:


Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUP TO $4K CASHBACK
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.04% p.a.
6.06% p.a.
Principal & Interest
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) repayments. All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for a 30 year term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. For Interest only loans – the monthly repayment figure is applicable only for the interest only period. After the interest only period, your principal and interest repayments will be higher than these repayments. For Fixed rate loans – the monthly repayment is based on an interest rate that applies for an initial period only and will change when the interest rate reverts to the applicable variable rate.

The Comparison rate is based on a secured loan amount of $150,000 loan over 25 years. WARNING: These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees together with costs savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products. Rates correct as of . View disclaimer.