In short: Help to Buy is the federal shared equity scheme. The government contributes up to 40% of the price of a new home or 30% of an existing one, you need a 2% deposit, and you repay the government's share when you sell or buy it back. At the time of writing, income caps are $100,000 for a single and $160,000 for a couple, and the Victorian price cap is $950,000.
Key takeaways
- The government's equity contribution reduces the loan you need, which reduces repayments and can make servicing possible on a modest income.
- Your deposit can be as low as 2%, and no LMI is payable because the loan-to-value ratio on the bank loan is low.
- Income caps apply and are tested at application. Earning more later does not remove you, but you may be asked to start buying back the government's share.
- The government shares in the property's growth in proportion to its equity. You do not pay rent on its share at the time of writing.
- Eligibility includes citizenship or residency criteria set by Housing Australia. Check the current rules before assuming a permanent resident qualifies.
For a single nurse, a young couple on early-career wages, or a family where one partner is studying, Help to Buy can turn a ten-year savings plan into a purchase this year. The catch is that the government owns part of your home until you buy it out. This post explains the mechanics with real dollar figures and where it fits for Nepali buyers alongside the First Home Guarantee.
How the scheme works
You buy the home in your name and live in it. A participating lender provides the loan for your share, and the government's contribution covers the rest. On sale, the government receives its percentage of the sale price, not the original dollar amount. You can also buy back its share in stages, usually at a minimum percentage per step, at the then-current valuation.
| Feature | Detail at the time of writing |
|---|---|
| Government contribution | Up to 40% for a new home, 30% for an existing home |
| Minimum deposit | 2% |
| Income caps | $100,000 single, $160,000 couple |
| Victorian price cap | $950,000 |
| Occupancy | Owner-occupier, must live in the home |
| Buy-back | Available in stages at market value |
| LMI | Not required |
Read the full Help to Buy shared equity scheme guide and confirm the current criteria with Housing Australia, which administers the scheme through participating lenders.
Help to Buy versus the First Home Guarantee
| Factor | Help to Buy | First Home Guarantee |
|---|---|---|
| Deposit | 2% | 5% |
| Income cap | $100,000 / $160,000 | None |
| Government's stake | Equity share of up to 40% | None, it guarantees part of the loan |
| Repayments | Lower, because the loan is smaller | Higher, you borrow up to 95% |
| Growth | Shared with the government | All yours |
| Best for | Lower incomes, servicing is the constraint | Higher incomes, deposit is the constraint |
Many Nepali households in Melbourne's north sit near the couple income cap. If you are under it and servicing a 95% loan is a stretch, Help to Buy is worth modelling. If you are over it, the First Home Guarantee is the tool. Our post Help to Buy versus the First Home Guarantee compares them for a range of incomes.
Worked example: a $650,000 new townhouse in Wollert
Sarita and Nabin earn $82,000 and $64,000, a combined $146,000, under the couple cap. They buy a new $650,000 townhouse in Wollert.
| Item | Help to Buy (new home, 40%) | First Home Guarantee |
|---|---|---|
| Purchase price | $650,000 | $650,000 |
| Government contribution | $260,000 (40%) | Nil |
| Deposit | $13,000 (2%) | $32,500 (5%) |
| Bank loan | $377,000 | $617,500 |
| Monthly repayment, for illustration at 6.00% p.a. over 30 years | About $2,260 | About $3,702 |
| First Home Owner Grant (new home under $750,000 in VIC) | $10,000 | $10,000 |
| Stamp duty (VIC first home buyer, $600,001 to $750,000) | Sliding concession | Sliding concession |
The monthly difference is about $1,440, which is what makes the purchase possible on their income. Use the mortgage repayment calculator to model your own figures, and see the First Home Owner Grant and stamp duty for first home buyers guides for the Victorian concessions.
Now the other side. Suppose they sell in eight years for $850,000. The government's 40% share is worth $340,000, an $80,000 gain on its contribution. Their own 60% share is worth $510,000 against a loan that has reduced to roughly $330,000, leaving them about $180,000 in equity before costs. They gave up part of the growth, but they were owners for eight years instead of renters, and they can buy back the government's share earlier if their incomes rise.
Where it fits for Nepali families
- New homes attract the larger 40% contribution, which pairs well with house and land packages in Melbourne's growth corridors.
- Because the loan is small, a single income can often service it. A parent on a single wage while a partner completes study or a bridging visa period is a typical fit.
- The income cap is a snapshot at application. A couple expecting salary increases can still apply now.
- Family who want to help can gift the 2% deposit or more; the usual gift letter and source-of-funds rules apply, and money cannot come from Nepal as a capital transfer.
Frequently asked questions
Can a permanent resident use Help to Buy?
Housing Australia sets the eligibility criteria, including residency or citizenship requirements, and they can differ from the First Home Guarantee. Check the current criteria on the Housing Australia website before relying on the scheme, and tell your broker your exact visa status so the right scheme is chosen.
Do I pay rent or interest on the government's share?
At the time of writing, no. You pay your loan repayments, rates, insurance and maintenance on the whole home, and the government simply holds its equity share. Its return comes from its percentage of the value when you sell or buy it back. Confirm the current terms in the scheme documents.
What happens if my income rises above the cap?
You are not removed from the scheme, but the rules can require you to begin buying back the government's share if you exceed the cap for a sustained period. That is usually a good outcome: it means your income has grown and you are converting more of the home into your own equity at a pace you can manage.
Can I use Help to Buy with the First Home Owner Grant and stamp duty concessions?
Generally yes, because those are state benefits assessed on their own rules. In Victoria a new home under $750,000 may receive the $10,000 grant, and first home buyers get a full duty exemption at or below $600,000 with a sliding concession to $750,000. Confirm with the State Revenue Office and Moneysmart has a plain-language overview of first home schemes.
Talk to GNT Finance
We model Help to Buy against the First Home Guarantee and a standard loan side by side so you can see the repayments and the equity outcome before you choose. Our service is in English, Nepali and Hindi through our Nepali mortgage broker page, and in most cases there is no cost to you for our home-loan service. Book a free consultation or call 0426 403 703. See first home buyer loans, and if you are still on a temporary visa, read home loans for visa holders, the FIRB approval explainer and our new migrants guide.
This is general information, not migration, legal, tax or credit advice. Migration rules change often — confirm with a registered migration agent (MARA) or the Department of Home Affairs.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.