Help to Buy Scheme: How It Works in NSW

Help to Buy is the federal government’s shared equity scheme, and it has been taking applications since 5 December 2025. The government buys a slice of your home alongside you, up to 30% of an existing home or up to 40% of a new one, and you need a deposit of just 2%. You borrow less. In exchange, the government owns that share of the home, and of every dollar it gains or loses, until you buy it back or sell.

That trade suits some buyers well and costs others a great deal. Most of this guide is about telling the two apart.

The settings this year

For the year to 30 June 2027 the income caps are $103,000 for a single applicant and $165,000 for joint applicants or a single parent, up from $100,000 and $160,000 last year. In New South Wales the property price cap is $1.3 million in Sydney and the regional centres, and $800,000 elsewhere. There are 10,000 places a year across the country, and when the state signed up, the NSW Government expected about 3,000 NSW buyers a year to use it.

On the Upper North Shore the price cap decides the question for houses before anything else does: the median non-strata sale price in Ku-ring-gai, which is mostly houses, was $3,300,000 in the March 2026 quarter, against $1,170,000 for strata. Up here, Help to Buy is a unit scheme.

The part most explanations skip is who can write the loan. Only six lenders are on the panel: Bank Australia, Commonwealth Bank, Teachers Mutual Bank, Health Professionals Bank, Firefighters Mutual Bank and UniBank. CommBank is the only one of the big four. If your own bank isn’t on that list, it can’t give you a Help to Buy loan, and no broker can route one through it either. What a broker can do is compare the six on everything else, because they still differ on how they read your income, your debts and the property you’re buying.

Who can use it

You don’t have to be a first home buyer. The scheme is open to a first-time buyer or someone returning to home ownership, but every applicant must be an Australian citizen aged 18 or over who doesn’t own property in Australia or overseas, with limited exceptions for single parents. You must live in the home as your principal place of residence, and renting it out isn’t allowed while you’re in the scheme.

There’s no lenders mortgage insurance either, despite the 2% deposit, which is a big part of why the repayments come in lower. And if a repayment of the government’s share is ever required, the customer guide says Housing Australia won’t require one that would force you to take out LMI.

How the government’s share works

You don’t pay the government rent or interest on its share, and the Help to Buy customer guide says so plainly. That’s the main attraction. What you give up is part of the gain, because the government shares proportionally in any gains or losses when you sell or buy it out. On a 30% share, $30,000 of every $100,000 the home gains is the government’s, and it wears the same share of a fall.

Buying it back happens in steps, and each voluntary repayment has to be at least 5% of the home’s value at the time, with you paying the valuation and administration costs. Because it’s measured against the value on the day, a home that has risen costs more to buy out than the share cost the government.

The income cap keeps applying after you move in. If your income is over it for two financial years in a row, you may have to repay part or all of the government’s contribution, although the lender first works out what you could reasonably afford, and you won’t be required to repay until you can. Anyone early in a career with a steep pay scale should read that line twice.

A hypothetical, run through the numbers

Here’s a hypothetical with invented round numbers: a first home buyer paying $900,000 for an existing unit in Sydney, once under Help to Buy and once under the 5% Deposit Scheme our First Home Guarantee guide covers. With a 30% government share, they put in $18,000, the government puts in $270,000 and the loan is $612,000. Under the 5% Deposit Scheme the deposit is $45,000 and the loan is $855,000. At a hypothetical 6% over 30 years, our repayment calculator puts those at about $3,669 and $5,126 a month.

That’s a gap of about $1,457 a month, and it’s real. So is the other side: if the unit later sold for more than $900,000, 30% of the sale price would go to the government, not 30% of what it originally put in.

Duty doesn’t change between the two. On our stamp duty calculator, a $900,000 first home under the NSW First Home Buyers Assistance Scheme carries $19,593 of transfer duty either way, because the concession phases out between $800,000 and $1 million. Above that there’s no concession at all.

What it stacks with, and what it doesn’t

The rule that matters most is blunt: Help to Buy and the 5% Deposit Scheme cannot be used together, and the scheme’s FAQ extends that to any other government shared equity scheme, loan or guarantee for the same purchase. You pick one.

Other help does stack. The First Home Super Saver scheme can build the 2% deposit, and Help to Buy can be used alongside stamp duty concessions, grants and exemptions at any level of government, which in NSW means the duty concession above. The super release still arrives weeks after you ask for it, the same timing problem at auction that our super guide walks through.

A pre-approval from a bank outside the panel doesn’t carry over, since the loan has to come from a participating lender. Start with one of the six if Help to Buy is the plan.

Which of the two we’d usually look at first

Our view, which the scheme’s supporters will argue with: for most first home buyers we see who can reach a 5% deposit, the 5% Deposit Scheme is the better deal of the two. It has no income caps and no lenders mortgage insurance, and its NSW price cap is $1.5 million in Sydney, higher than Help to Buy’s. All the growth stays yours. Paying the higher repayment for a few years is usually cheaper than handing over 30% of a Sydney property’s gains for however long it takes to buy the government out, and the equity share is exactly where Sydney prices do the damage.

Help to Buy earns its place for a different buyer. Someone whose limit is borrowing power rather than the deposit, a single buyer on a modest income for instance, may not be able to service the larger loan at all, and for that person giving up part of the growth is the price of owning rather than renting. That’s a fair trade to make with your eyes open.

Sina’s first question on a Help to Buy enquiry is which of the six participating lenders you’d be comfortable banking with, because we can’t place a Help to Buy loan anywhere else. If the lender you want isn’t on the panel, we’d rather tell you that in the first call than after you’ve found the unit. And we can’t tell you what the home will be worth when you come to buy the government out. Nobody can.