What is the Help to Buy Scheme?

If you’ve come across information about the NSW Shared Equity Home Buyer Helper, it’s worth knowing that the scheme closed to new applicants on 30 June 2024 and hasn’t reopened. 

The good news is there’s now a federal alternative. The Australian Government’s Help to Buy scheme lets eligible buyers purchase a home with the government as a part-owner, cutting your deposit and loan repayments right down.

How the Help to Buy scheme works

Under Help to Buy, you save a deposit of as little as 2% and take out a home loan through a participating lender for the rest. The government contributes the remainder, up to 30% of the purchase price for an existing home or 40% for a new build, in exchange for the same share of ownership.

There’s no interest or rent charged on the government’s share while you’re in the scheme. You do share proportionally in any gain or loss when you sell, or when you eventually buy back the government’s stake.

Are you eligible for the Help to Buy scheme?

To qualify, you’ll generally need to:

• Be an Australian citizen aged 18 or over
• Have a taxable income at or below $103,000 as an individual, or $165,000 as a couple or single parent, with these thresholds indexed and adjusted each year
• Plan to live in the property as your main home, not rent it out
• Not currently own property in Australia or overseas

In NSW, the property also needs to sit under the price cap for its location. Sydney and several regional centres, including Newcastle and the Central Coast, currently sit at $1,300,000, with a lower cap elsewhere in the state. We’ll confirm the current figure for your target area before you make an offer.

What does it cost over time?

You don’t make repayments on the government’s share while you’re part of the scheme, but it isn’t free money. You’ll need to keep the property insured, keep meeting the eligibility criteria, and take part in periodic reviews of your income and circumstances.

Eventually, you’ll leave the scheme, either by making voluntary payments to buy back the government’s share, refinancing once you have more equity, or selling the property. Whatever the property is worth at that point determines the government’s share value, too, so a rising market means a larger amount to pay out.

Help to Buy or the 5% Deposit Scheme?

You can’t use Help to Buy alongside the Australian Government 5% Deposit Scheme, so it’s worth weighing up the two. 

The 5% Deposit Scheme has no income cap and doesn’t involve sharing ownership, but you’ll be borrowing a larger amount overall. Help to Buy caps your loan size and can meaningfully lower your repayments, but it only suits buyers under the income threshold who are comfortable sharing ownership with the government.

Getting started with Help to Buy

Help to Buy is currently offered through a small number of participating lenders rather than every bank on our panel. We’ll help you work out whether it’s genuinely worth pursuing, or whether the 5% Deposit Scheme, the First Home Owner Grant, or another approach gets you into a home sooner.

If you’d like to talk through your options, get in touch online or book a free 15-minute Discovery Call to find out what’s available to you. We work with first-home buyers across Newcastle, Maitland, Singleton, and the Central Coast, and we’re across the details so you don’t have to be.

For a broader look at every scheme available to first home buyers, see our first home buying guide!

Disclaimer

Watson Mortgages Pty Ltd (Nestor Ramirez Credit Representative Number 378816 and Gary Gilbert Credit Representative Number 432216) is authorised under Australian Credit Licence 389328. Watson Mortgages Pty Ltd ABN 29 642 538 967 is a separate entity to Elliot Watson Financial Planning Pty Ltd. Elliot Watson Financial Planning Pty Ltd is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.