Mitch Callaghan, 31, is a carpenter from St Albans in Melbourne's west, and his partner Sarah Nguyen, 29, is a dental nurse. Between them they've saved $30,000 — no small feat while paying $600 a week in rent and expecting their first baby in February. But in a market where a decent home costs $800,000, a 20% deposit of $160,000 felt like a mountain they couldn't climb before their kid started school.
Then, at a barbecue in Sunshine last summer, a mate told them about Help to Buy — the federal shared-equity scheme launched in December 2025. Under it, the mountain shrinks: a 2% deposit instead of 20%, with the government buying up to 40% of the home alongside you. Here's how the equity split works, who qualifies, and how to land one of the 10,000 yearly places.
How the equity split actually works
Let's make it concrete with the kind of home Mitch and Sarah are looking at: an $800,000 existing place. They'd contribute $16,000 — that's their 2%. The government chips in $240,000 (30%, the rate for existing homes; new builds get up to 40%), and their lender covers the rest. Because the loan is now only 68% of the property's value, there's no LMI — lenders mortgage insurance simply doesn't apply.
Down the track, when they sell or buy out the government's share, the payout is based on what the property is worth at that time — the government shares the gains and the losses in proportion to its stake. It's a partnership, not a loan: no interest is ever charged on the government's share. It just sits there until you buy it out or sell.
The caps — check before you fall in love with a house
The income caps use your FY2026 taxable income: $103,000 for singles, and $165,000 for joint applicants and single parents. Mitch and Sarah scrape under as a couple. Property price caps vary by region — around $1.3 million across Sydney and NSW regional centres, versus about $600,000 in regional South Australia — so check your area before you start inspecting.
And places are genuinely limited: 10,000 a year nationally, with 2,356 places conditionally or fully approved in the first two months alone. Demand is strong, so don't dawdle — but don't panic either. Once you're conditionally approved, your place is reserved for up to 90 days while you find a home.
How to actually apply
You can't apply directly to the government — your path runs through a participating lender: Commonwealth Bank, Bank Australia, Teachers Mutual Bank, or Queensland Country Bank, which joined the panel on October 6, 2026. That's four doors in, not one.
The basics: you must be 18 or older, an Australian citizen, intend to live in the home as your principal residence, and not currently own any property — in Australia or overseas. State stamp-duty concessions and first-home grants can stack on top of Help to Buy, but other federal home-buyer schemes can't. One firm rule: you can't stack both federal schemes on the same purchase.
Help to Buy vs the 5% Deposit Scheme
Which one fits you? Help to Buy wins if your deposit is tiny and you're comfortable sharing ownership with the government for a while — Mitch and Sarah's $30,000 is plenty. The 5% Deposit Scheme — a government guarantee with no equity share — suits buyers who can save a little more and want to own 100% from day one.
Try the shared-equity calculator at the top of this page with your own numbers. And a warning for the road: brokers advertising 'guaranteed Help to Buy approval' for an upfront fee are running a scam — approvals come from the participating lenders, never from a stranger on Facebook. Official details live at firsthomebuyers.gov.au; we're just an independent guide explaining it in plain English.
One practical tip from Mitch and Sarah's mortgage broker: get your documents ready before you approach a lender — recent payslips, your FY2026 Notice of Assessment, bank statements showing your deposit, and ID. Lenders are processing a lot of these applications, and a complete file moves to the front of the queue. Sarah had her NOA buried in the myGov inbox; digging it out early saved them a week.
The 90-day house hunt
Here's the part Mitch and Sarah found oddly civilised: once you're conditionally approved through your lender, your place in the scheme is reserved for up to 90 days while you find a home. Ninety days of house-hunting without the allocation evaporating underneath you.
Their strategy: get pre-approval first, then inspect with confidence. They've shortlisted townhouses in Melbourne's outer west — Wollert, Mickleham, places where $800,000 still buys a new build. With the baby due in February, their deadline is emotional rather than official — but the 90-day window means they can move at the speed of the market, not the speed of panic.