Help to Buy Scheme Australia: Buy a home with 2% deposit

For many Australians who have not yet entered the property market, buying a home feels like a distant dream. With rising property prices and the increasing cost of living, saving a 20% deposit can seem almost impossible. That’s where the Help to Buy Scheme comes in — a new federal government initiative designed to make home ownership more accessible for low- and middle-income earners.

If you’ve been struggling to get your foot on the property ladder, here’s everything you need to know about how this scheme works, who’s eligible, and when it’s set to launch.

What Is the Help to Buy Scheme?

The Help to Buy Scheme is a shared equity program launched by the Australian Government. Under this scheme, eligible buyers can purchase a home with as little as a 2% deposit — and the government will contribute up to 40% of the purchase price for new homes or 30% for existing homes.

In return, the government holds an equivalent share in your property, which you’ll repay when you sell, refinance, or buy out the government’s stake over time.

Property Price Caps for the Help to Buy Scheme

There are maximum property prices put in place depending on your location, which are shown in the table below:

How Much Can I Borrow with the Help to Buy Scheme?

The Australian Government's Help to Buy Scheme is designed to assist eligible home buyers by providing an equity contribution, thereby reducing the amount you need to borrow from a lender. Under this scheme, the government will contribute up to 40% of the purchase price for new homes and up to 30% for existing homes. This means you would need to secure financing for the remaining 60% or 70% of the property's value, respectively.

Calculating Your Borrowing Amount

The maximum amount you can borrow under the Help to Buy Scheme depends on the property's purchase price and the government's equity contribution. Here's how it works:

New Homes: With a government contribution of up to 40%, you would need to borrow the remaining 60% of the property's value.

For example:

• Property Price: $800,000
• Government Contribution (40%): $320,000
• Your Required Loan (60%): $480,000

Existing Homes: With a government contribution of up to 30%, you would need to borrow the remaining 70% of the property's value.

For example:

• Property Price: $800,000
• Government Contribution (30%): $240,000
• Your Required Loan (70%): $560,000

Note: it is important to remember that your borrowing capacity is also limited by your ability to repay the loan. This will vary based on the lender and the current interest rates. To estimate how much you can borrow, use this borrowing power calculator, or for a more accurate calculation, speak to a FREE mortgage broker from Eden Emerald Mortgages.

How Do I Apply for the Help to Buy Scheme?

Applying for the Help to Buy Scheme involves several steps, but the process doesn’t have to be overwhelming. Eligible Australians will need to provide documents verifying income, residency status, and deposit savings. From there, you’ll need to find a lender that participates in the scheme and apply for a home loan that meets the government’s shared equity guidelines. Property price caps and income limits will apply, so it’s essential to understand what you qualify for before beginning the search for a home.

The easiest and most stress-free way to apply is by reaching out to Eden Emerald Mortgages. Our experienced mortgage brokers specialise in government schemes like Help to Buy and can walk you through every step — from checking your eligibility and gathering the right paperwork to securing a lender that fits your needs. Best of all, our guidance is completely free of charge (as we are paid by the lender). Let Eden Emerald Mortgages take the confusion out of the process so you can focus on finding the right home.

When Does the Help to Buy Scheme Start in Australia?

The Help to Buy Scheme is expected to begin in late 2025, with legislation already introduced by the federal government. Once it is available, eligible Australians will be able to apply for one of the 10,000 annual places available. You can check the government website to see if they have announced a date yet.

While the launch date may not be announced yet, now is the perfect time to prepare. Speaking with a mortgage broker can help you get your finances in order so you’re ready to apply as soon as the scheme opens.

An expert mortgage broker from Eden Emerald Mortgages will be able to guide you through the entire process and get you into your home with as little stress as possible. There is no fee for using our mortgage broker services, as we are paid commission from the lender.