How the Help to Buy Scheme Could Help You Buy Sooner – Even with a 2% Deposit

explore670
Dec 5, 2025
4 min read

If you’ve been dreaming of owning your own home but feel stuck because of high prices and slow savings, you’re not alone. For many people in South West Sydney, saving a 20% deposit feels out of reach. That’s where the new Help to Buy scheme can make a difference.

Launched on 5 December 2025, this federal government initiative is designed to help eligible buyers purchase a home with as little as a 2% deposit.

What is the Help to Buy Scheme?

Help to Buy is a shared equity scheme. That means the government contributes up to 40% of the property price for new homes or 30% for existing homes. In return, they hold that same percentage as equity in the house.

You still own and live in the home. The government doesn’t charge rent or monthly payments for its share. When you eventually sell or refinance, you repay the government its percentage based on the home’s value at that time.

A Simple Example

Let’s say you want to buy a $700,000 home:

You contribute a 2% deposit = $14,000
The government contributes 30% = $210,000
You borrow the remaining 68% = $476,000

Because you’re borrowing less, your monthly mortgage repayments are lower, and you won’t need to pay lenders' mortgage insurance (LMI), which is often required for low-deposit loans.

Who is Eligible?

To access the scheme, you must:

Be an Australian citizen aged 18 or over
Intend to live in the home (not an investment property)
Have a taxable income of under $100,000 for singles or $160,000 for couples/single parents.
Not currently own property in Australia or overseas
Have saved at least 2% of the purchase price as a deposit

There are also property price caps, which vary by region. In Sydney and surrounding areas, there is a maximum property price limit, so not every property will qualify.

What Does This Mean for Monthly Repayments?

Because the government is covering a significant portion of the purchase price, you’re taking out a much smaller home loan.

That can mean

Lower monthly mortgage repayments
No lender's mortgage insurance (LMI) in many cases
A chance to enter the market sooner instead of waiting years to save a big deposit

Lower repayments can also give you more breathing room to manage other living costs or build savings.

How Is This Different from the First Home Guarantee / 5% Deposit Scheme Changes?

You might have also seen news about changes from 1 October 2025 to what used to be called the Home Guarantee Scheme, now branded as the Australian Government 5% Deposit Scheme (often still referred to as the First Home Guarantee).

It’s easy to mix them up, but they’re not the same thing. Here’s the simple breakdown:

1. Government role

Help to Buy: The government becomes a co-owner with you. It takes an equity stake (up to 30–40%) and shares in future gains or losses when you sell or buy them out.
5% Deposit Scheme (First Home Guarantee): The government acts as a guarantor, not a co-owner. It guarantees up to 15% of the property’s value so that you can buy with a 5% deposit (or 2% for single parents) without paying LMI. You still borrow 95–98% in your own name and repay the entire loan yourself.

2. Deposit and spots

Help to Buy:
- As little as 2% deposit
- Limited places (around 10,000 per year nationally)
5% Deposit Scheme:
- 5% deposit for most first home buyers (2% for eligible single parents/legal guardians)
- From 1 October 2025, there are unlimited places, no waitlist and no income caps.

3. Income and price caps

Help to Buy:
- Income caps apply (e.g. $100k single, $160k couple/family)
- Property price caps apply by region (with a set ceiling for Sydney)
5% Deposit Scheme:
- No income caps after 1 October 2025
- Higher price caps nationally (for example, Sydney caps have been lifted significantly under the new settings)

4. Lenders

Help to Buy (for now):Currently available through a very small number of lenders – at the time of writing, Commonwealth Bank and Bank Australia have been named as participating lenders, with more expected to join in 2026.
5% Deposit Scheme:Available through a broad panel of more than 30 participating lenders, including many major banks and credit unions.

In short:

Help to Buy is about the government co-investing with you, so you borrow less.
The 5% Deposit Scheme is about the government backing your loan so that you can buy with a smaller deposit and no LMI, but you still carry the full debt.

Both aim to make buying easier, but they work differently and will suit different people. You can read more about the amended first home buyers guarantee here.

What to Keep in Mind

The scheme has real benefits, but it’s important to understand the trade-offs:

You’ll eventually need to repay the government’s share when you sell, refinance, or choose to buy them out
The government’s equity share goes up or down with the property’s value
You still need to meet standard lending criteria with a participating bank or lender
Other costs like stamp duty, legal fees and moving costs may still apply

This is a big financial decision. Treat Help to Buy as one option to explore, not an automatic “yes”.

How Citywide LPI Bankstown Can Help

If you’re wondering whether you qualify or how this scheme could work in your situation, we’re here to help.

At Citywide LPI Bankstown, we help everyday people gain clarity about their options and take smart steps toward home ownership. We can help you:

Check your eligibility for schemes like Help to Buy
Understand the pros and cons of shared equity
Explain which lenders are currently participating
Get your paperwork and finances ready if you decide to explore an application in the future
Put together a plan if you’re not quite ready yet, including improving your credit or savings position

We know South West Sydney. We understand the pressures, the diversity and the goals families in our area are working towards.

Let’s Talk

This could be your opportunity to get into the market sooner – and with much less upfront.

Book a chat with our team today to talk through your home ownership options and see whether schemes like Help to Buy might suit you in the future.