How to Make the Most of the 2025 Help to Buy Scheme as a First Home Buyer

Key Takeaways:

• The 2025 Help to Buy Scheme lets eligible buyers purchase with as little as a 2% deposit and no Lenders Mortgage Insurance.
• The government takes a share in your property, which you’ll repay when you sell, refinance, or buy them out.
• Understanding eligibility, benefits, risks, and how to combine this scheme with other grants is crucial for first-time buyers in Australia.

Buying your first home in Australia can feel like a marathon—especially with house prices, interest rates, and the cost of living all on the rise. But in 2025, there’s a new player on the field: the federal government’s Help to Buy Scheme. If you’re a first-time buyer, this could be your ticket to getting into the housing market sooner, with a smaller deposit and a bit of help from the government. But how does it actually work, and how do you make the most of it? Let’s break it down, step by step.

What is the Help to Buy Scheme?

The Help to Buy Scheme is a shared equity scheme designed to help eligible buyers buy their first home with as little as a 2% deposit. The government chips in up to 40% of the property price for new homes (or 30% for existing homes), meaning you need to borrow less from the bank and can avoid paying Lenders Mortgage Insurance (LMI). In return, the government owns an ownership stake of your home, which you’ll need to pay back if you sell, refinance, or want to buy them out down the track.

Who’s Eligible for the 2025 Help to Buy Scheme?

Not everyone can jump on board. To qualify, you’ll need to:

• Be an Australian citizen over 18

• Earn less than$100,000 a year (or$160,000 for joint applicants)

• Live in the home as your main residential property

• Have at least a 2% deposit saved

• Buy a property under the property price caps for your state (e.g.$1.3M in Sydney,$1M in Brisbane—check the latest figures for your area)

You can’t own any other property, and you’ll need to meet the usual lending criteria with your bank or lender.

What Are the Benefits of the Help to Buy Scheme?

• Smaller deposit needed: You can get in with just 2% of the purchase price.
• No LMI: The government’s involvement means you skip the hefty LMI bill, which can save you thousands on Lenders Mortgage Insurance.
• Lower repayments: Because you’re borrowing less, your monthly repayments are more manageable.
• Faster entry to the market: You don’t have to wait years to save a massive deposit.

What Are the Risks of the Help to Buy Scheme?

• Shared ownership: The government owns a chunk of your home, so if the value goes up, so does the amount you’ll need to pay back as an equity contribution.
• Limited flexibility: Want to renovate, refinance, or sell? You’ll need to get the government’s approval or pay out their share.
• Property price caps: You might be limited in where and what you can buy, especially in pricier suburbs.
• Ongoing obligations: You’ll need to keep the property well maintained and insured, and you can’t rent it out.

How to Make the Most of the 2025 Help to Buy Scheme as a First Home Buyer

1. Get your paperwork sorted early:
   Lenders and the government will want to see proof of income, savings, and ID. Get your documents together before you start house hunting.

2. Check your eligibility:
   Use the government’s online tools or chat to a mortgage broker to make sure you tick all the boxes for eligible home buyer status.

3. Do your sums:
   Work out how much you can afford, factoring in the deposit, stamp duty, legal fees, and moving upfront costs. Don’t forget to budget for ongoing costs like rates and insurance.

4. Shop around for lenders:
   Not all banks are participating in the scheme, and some might offer better rates or more flexible terms. A good mortgage broker can help you compare your options.

5. Think long-term:
   Remember, you’ll need to pay back the government’s share eventually. If your property goes up in value, so does their cut. Plan for how you might buy them out in the future, or what happens if you want to sell.

6. Combine with other grants:
   You might be able to stack the Help to Buy Scheme with state-based first home buyer grants or stamp duty concessions. This could save you even more.

7. Get advice:
   This scheme is new, and the fine print matters. Chat to a mortgage broker or financial adviser who understands the ins and outs.

FAQs about the 2025 Help to Buy Scheme

Can I use the scheme with a partner?
Yes, as long as you both meet the eligibility criteria and your combined income is under the cap.

What if I want to renovate?
You’ll need to get approval from the government before making major changes.

Do I have to pay back the government’s share straight away?
No, but you will when you sell, refinance, or if you want to buy out their share.

Can I rent out the property?
No, you must live in the home as your main residential property.

Final Thoughts

The 2025 Help to Buy Scheme could be a real leg-up for first-time buyers, but it’s not a one-size-fits-all solution. Weigh up the pros and cons, get expert advice, and make sure it fits your long-term plans. This can greatly improve housing affordability.

Ready to see if you qualify or want to chat through your options? Book a call with Jordan at Mountway Finance—no pressure, just straight-up advice to help you get moving.