NEW Government ‘Help to Buy’ Scheme

You are currently viewing NEW Government ‘Help to Buy’ Scheme

The Government has introduced a new shared equity scheme for Australian home buyers that will come into effect this year (2024).

But what’s the Help to Buy Scheme all about?

The Help to Buy scheme

The Help to Buy scheme is a Government shared equity initiative to help Australians purchase a first-home sooner.

40,000 Australians will be able to purchase a home with only a 2% deposit (minimum) and without paying Lender’s Mortgage Insurance (LMI). Learn more about Lender’s Mortgage Insurance here.

10,000 loans will be available each year and all states/territories in Australia will be participating.

In Victoria, you cannot use the loan on a property more than $850,000.

Are you eligible?

To be eligible, you must:

  • Be 18 years or older
  • Be an Australian citizen
  • Earn less than $90,000 for single applications
  • Earn less than $120,000 for joint applications
  • Live in the home you purchased
  • Not currently own a home in Australia

How does it all work?

The home buyer will obtain a home loan after contributing a minimum deposit of 2% and paying for upfront costs such as stamp duty.

The Federal Government will then make an equity contribution of up to 30% for an existing property and up to 40% for a new home, and therefore own this amount of the property until the arrangement ends.

As the loan term continues, you will need to pay the Government back when you sell the property. However, you will not need to pay rent or interest on the Government’s share.

Note: If you can afford to own more of the home after 2 years, you can buy back 5% of the Government’s portion.

How to apply

  1. Check your eligibility.
  2. Talk to your Aintree Group Finance Mortgage Broker to discuss if this is the right option for you.
  3. Find your home.
  4. Work with your broker to submit an application.

How does this differ from the First Home Guarantee?

This scheme is very similar to the Government’s updated version of the Home Guarantee, but there are notable differences. See below.

Check out our full First Home Buyer Scheme Comparison here.

You should always speak to a mortgage broker before committing to any of these Government schemes as they may not be the right fit for your current circumstances.

Contact our Aintree Group Finance team today to discuss your options with an expert – we are always happy to help!

Disclaimer: The information in this blog is of a general nature only, and is not a complete or definitive statement of the matters described in it. It has been prepared without taking into account your personal objectives, financial situation or needs. It should not be relied upon as a substitute for financial or other specialist advice.