Help To Buy Scheme

By Andrew Paterson

The federal government’s Help to Buy scheme is now open – and for Geelong buyers who’ve been struggling to save a deposit, it might just change everything.

Unlike the First Home Guarantee which still requires a 5% deposit, Help to Buy needs just 2%. On a $700,000 home, that’s the difference between finding $35,000 and finding $14,000. For a lot of people, that gap is the difference between buying this year and waiting another three.

How Help to Buy actually works

This is a shared equity scheme. The government contributes part of the purchase price and becomes a part-owner of your property. You don’t pay rent on their share, but you’ll need to repay it eventually – either when you sell, or by buying them out over time.

The numbers break down like this:

For new homes: The government contributes up to 40% of the purchase price
For existing homes: Up to 30%

So if you’re buying a new $700,000 house in Geelong, you could put in 2% ($14,000), the government contributes 40% ($280,000), and you only need a mortgage for the remaining 58% ($406,000). Your monthly repayments drop substantially because you’re borrowing less than half what you’d normally need.

The catch? When property values rise, the government’s share rises too. If that $700,000 home is worth $850,000 when you sell, the government gets 40% of $850,000 – not 40% of what they originally put in. They share the upside. They also share any losses, which is some consolation.

Who can apply?

Help to Buy is aimed at lower to middle income earners. The eligibility rules:

Income caps:

• Singles: $100,000 taxable income
• Couples or single parents: $160,000 combined

Citizenship: You must be an Australian citizen (not just a permanent resident)

Property ownership: You can’t currently own any property in Australia or overseas

Age: At least 18 years old

Residence: Must live in the property as your principal home

You also can’t combine Help to Buy with other government shared equity schemes or guarantees. However, you can still access stamp duty concessions, the First Home Owner Grant, and the First Home Super Saver Scheme. That’s important – it means Geelong buyers can potentially stack multiple benefits.

Property price caps for Victoria

The property price caps vary by location. For Victoria:

Melbourne: $950,000
Geelong (as a regional centre): $800,000
Other regional Victoria: $650,000

Geelong gets special treatment here – it’s classified as a “regional centre” alongside Newcastle and the Gold Coast, which means higher caps than other regional areas. Good news if you’re looking around Belmont, Highton or the northern suburbs where prices have pushed past what smaller regional caps would allow.

These caps apply to existing homes, new builds, townhouses, apartments, house and land packages, and even vacant land with a building contract. If you’re considering a building loan, the total land price plus construction costs need to stay under the cap.

Where to apply

Here’s the slightly frustrating part: you can’t apply directly to Housing Australia. You have to go through a participating lender.

Right now, only two lenders are on the panel:

• Commonwealth Bank – but only through their branch network (not via brokers)
• Bank Australia – accepting applications through mortgage brokers

More lenders are expected to join between March and June 2026. This matters because with only two options, you’re limited in terms of comparing rates and features. Once the panel expands, there’ll be more flexibility.

Bank Australia is currently the only option if you want to work with a mortgage broker. If you’d prefer someone to compare your options and handle the process for you, that’s the path right now.

The 90-day clock

Once you’re conditionally approved, you have 90 days to find a property and sign a contract. You can request one 90-day extension, but that’s it.

This isn’t unusual – most pre-approvals work on similar timeframes. But it’s worth knowing before you apply. Make sure you’re actually ready to buy, not just testing the waters.

Ongoing obligations

Help to Buy isn’t a set-and-forget arrangement. Once you’re in:

• You must live in the property as your principal residence
• You need to keep adequate building insurance and provide evidence to Housing Australia annually
• Housing Australia reviews your arrangement every 5 years
• If your income exceeds the thresholds for two consecutive years and you have capacity to repay, you may be required to buy back some or all of the government’s share
• Renovations over $20,000 need to be reported to Housing Australia

The income review is the one that catches people off guard. If you get a promotion or your partner goes back to full-time work and your household income jumps above $160,000 for two years running, you might need to start buying out the government’s share earlier than planned.

Repaying the government’s share

You have three options:

1. Voluntary repayments – Buy back portions of the government’s share whenever you want (minimum 5% of property value per repayment)
2. When you sell – The government simply takes their percentage of the sale price
3. Refinancing – You can refinance and pay out the government’s share in one go

There’s no interest charged on the government’s share while you own the home. But remember, their share grows (or shrinks) with the property’s value – so if you’re in a rising market, there’s an argument for buying them out sooner rather than later.

Help to Buy vs other schemes

The landscape for government grants and schemes has shifted quite a bit recently. Here’s how Help to Buy compares:

vs First Home Guarantee: The First Home Guarantee requires 5% deposit but doesn’t involve shared ownership – you keep 100% of any capital gains. From October 2025, there are now unlimited places and no income caps on the First Home Guarantee, which makes it more accessible than before.

vs Victorian Homebuyer Fund: The Victorian Homebuyer Fund closed to new applicants in September 2025. If you were considering it, Help to Buy is now the main shared equity option.

vs First Home Owner Grant: The FHOG is $10,000 for new homes under $750,000 – and you can combine it with Help to Buy. Building a new home in Geelong? You could potentially access both.

The key question is whether you’d rather own 100% of a property with a larger mortgage (First Home Guarantee) or own a smaller share with lower repayments (Help to Buy). Neither is universally better – it depends on your circumstances and how quickly you expect your income to grow.

What it means for Geelong buyers

Let’s run through a real scenario. Say you’re buying a new $700,000 townhouse in Grovedale:

Using Help to Buy:

• Your deposit: $14,000 (2%)
• Government contribution: $280,000 (40%)
• Your mortgage: $406,000 (58%)
• Plus FHOG: $10,000 cash grant
• Plus stamp duty exemption: $0 duty (property under $600,000 wouldn’t qualify, but you’d get a concession on $700k)

Compare that to buying without any schemes:

Going it alone:

• Deposit needed to avoid LMI: $140,000 (20%)
• Your mortgage: $560,000
• Stamp duty: roughly $37,000

The deposit difference alone – $14,000 vs $140,000 – explains why this scheme exists. For essential workers, single parents, and anyone who’s been watching property prices outpace their savings, that gap was becoming impossible to close.

Is Help to Buy right for you?

Shared equity isn’t for everyone. Consider it carefully if:

• You expect significant income growth (you may be required to buy out the government sooner)
• You’re planning to sell within a few years (transaction costs plus repaying the government’s share could eat into your gains)
• You want maximum flexibility to renovate or refinance

But if you’ve been saving steadily, earn a reasonable income, and just need help bridging the deposit gap – this scheme directly addresses that problem.

What to do next

If Help to Buy sounds like it might work for you:

1. Check your eligibility using the Housing Australia eligibility tool
2. Get your finances in order – you’ll still need to meet standard lending criteria
3. Talk to a participating lender – currently Commonwealth Bank or Bank Australia
4. Consider your options – would the First Home Guarantee or combining other grants and schemes work better for your situation?

The scheme has 10,000 places available nationally each year, spread across different locations. It’s not unlimited, so if you’re eligible and ready to buy, don’t wait too long.

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Need help figuring out which schemes you qualify for? We help Geelong first home buyers navigate these options every day. Book a free lending strategy session and we’ll walk through your situation – what you’re eligible for, what the numbers actually look like, and whether shared equity makes sense for you.