What is the Help to Buy Scheme?
In a previous news article, we introduced the Australian Government’s 5% Deposit Scheme. This time, we’re taking a closer look at the Help to Buy Scheme—a shared equity initiative designed to help more Australians achieve home ownership.
How does the Help to Buy Scheme work?
The Help to Buy Scheme allows eligible buyers to purchase a home with financial assistance from the Australian Government. Rather than lending you more money, the Government contributes an equity share towards the purchase price, either up to 30% for an existing home or 40% for a newly built home – like a house and land package in Tarneit!
You own and live in your home as normal, while the Government holds a proportional ownership share. You can choose to buy back the Government’s share over time, or it will be repaid when you sell your home.
Can I buy a home with just a 2% deposit?
One of the biggest barriers to home ownership is saving a large deposit. The Help to Buy Scheme is designed to make buying a home more achievable by reducing the upfront costs for eligible buyers.
With the scheme, you may be able to:
- Purchase a home with a deposit from as little as 2%
- Benefit from lower mortgage repayments because you’re borrowing less
- Avoid paying Lenders Mortgage Insurance (LMI)
By reducing the amount you need to borrow, the scheme can help ease mortgage stress and make home ownership more affordable over the long term.
What are the key considerations?
When purchasing through the Help to Buy Scheme, you will own your home while sharing part of its value with the Australian Government.
Because the Government contributes towards the purchase price, it also shares proportionally in any increase or decrease in the property’s value. If your home’s value changes over time, the value of the Government’s equity share changes too.
You can gradually buy out the Government’s share overtime, or repay the remaining share when you sell the property.
As the Help to Buy Scheme offers significant financial assistance, eligibility criteria and property price caps apply.
What’s required?
To purchase under the Help to Buy Scheme, you’ll generally need to:
- Save a minimum 2% deposit
- Meet the scheme’s eligibility requirements
- Obtain finance through a participating lender
- Receive Help to Buy approval before purchasing your home
- Purchase an eligible property that meets the schemes requirements
For newly built homes, the property must generally be completed as a turnkey home, including items such as the driveway, landscaping, window furnishings and other standard inclusions. Building contracts must also be fixed-price contracts. Chat to our Marigold Team for Turnkey Home Builder recommendations.
Why consider the Help to Buy Scheme?
The scheme is designed to help eligible Australians purchase a home sooner by:
- Reducing the deposit required to enter the market
- Lowering ongoing mortgage repayments
- Bridging the gap between borrowing capacity and the cost of a suitable home
- Making home ownership more accessible for first home buyers
Could you be eligible?
If you’re considering purchasing your first home, the Help to Buy Scheme could make your home ownership goals more achievable.
Our team can connect you with participating builders and experienced mortgage professionals who can help you understand the scheme, assess your eligibility and guide you through the application process.
To learn more about eligibility requirements and how the scheme works, visit the Australian Government’s Help to Buy Scheme website.
You can also speak to our friendly sales team on 1300 888 181 or via email at info@marigoldtarneit.com.au.
