5% Deposit Scheme vs Help to Buy 2026

TL;DR — 30 SECOND ANSWER

Choose the 5% Deposit Scheme if you have a 5% deposit, want 100% ownership of your home, and earn above the $100K single / $160K couple Help to Buy cap (or expect to). Choose Help to Buy if your deposit is under 5%, you need the government to share the purchase price (their share is 30% existing / 40% new), and you accept that you will not own 100% of your home until you buy back the government share. You cannot combine these two on the same purchase — pick one.

Side-by-side comparison

	5% Deposit Scheme	Help to Buy
Minimum deposit	5% (3% must be genuine savings)	2%
Ownership at settlement	100% (you own the home)	60-70% (government holds the remainder)
Income cap (single)	None (removed 1 Oct 2025)	$100,000
Income cap (couple)	None (removed 1 Oct 2025)	$160,000
Places per year	Unlimited	10,000
LMI payable	Zero (government guarantees up to 15%)	Zero
New builds only?	No — established homes qualify	No — but government share is 30% existing / 40% new
Sydney property cap (2026)	$1,500,000	$1,300,000
Melbourne property cap (2026)	$950,000	$950,000
Brisbane property cap (2026)	$1,000,000	$1,000,000
Perth property cap (2026)	$850,000	$850,000
Eventual buy-back required	No — you already own 100%	Yes — at sale, or when you can afford to buy back the government share
Capital gain on the government share	Yours 100%	Split proportionally (you keep your share, gov keeps theirs)
Best for	Buyers who can save 5%, want full ownership, want flexibility for capital growth, or earn above Help to Buy caps	Buyers who genuinely cannot reach 5% deposit, accept shared-equity dilution, and qualify under the income caps

Which is right for you?

Pick 5% Deposit Scheme if…

Your deposit is 5% or higher
You earn above the Help to Buy income caps now or expect to within 5 years
You want 100% of capital growth on your property
You want maximum flexibility on resale timing
You can stack with state FHOG (the 5% Deposit Scheme combines cleanly with state grants)

Pick Help to Buy if…

Your deposit is less than 5% (between 2% and 5%)
You qualify under the $100K/$160K income caps and dont expect to materially exceed them
You accept that the government will own 30-40% of your home until you buy them out
You are buying in a market where the government share is genuinely needed to reach affordability (e.g. inner Sydney/Melbourne)
You plan to live in the home long-term (the buy-back mechanics work best on 7-10+ year holds)

Can you combine them?

You cannot combine the 5% Deposit Scheme and Help to Buy on the same purchase — they are mutually exclusive federal schemes. However, both can be combined with state First Home Owner Grants (FHOG) in most states, and with the First Home Super Saver Scheme (FHSSS) for accelerated deposit saving. The 5% Deposit Scheme generally stacks more cleanly because it leaves you with 100% ownership.

FAQs

Can I switch from Help to Buy to the 5% Deposit Scheme later?#

No — your scheme is locked in at the time you sign the contract. You cannot "upgrade" from Help to Buy to the 5% Deposit Scheme after settlement. If you want full ownership, you must buy back the government share (typically at market value at the time of buy-back). For this reason, only choose Help to Buy if you genuinely cannot save the extra 3% to qualify for the 5% Deposit Scheme.

Which scheme has higher property price caps?#

The 5% Deposit Scheme has higher caps in Sydney ($1.5M vs Help to Buys $1.3M). In Melbourne, Brisbane, Perth, Adelaide, Hobart, Canberra and NT the two schemes have the same property price caps. So if you are buying in Sydney metro and your purchase price is between $1.3M and $1.5M, the 5% Deposit Scheme is the only option.

Does Help to Buy charge rent on the government share?#

No. The government share is equity, not rent. You only pay back the governments share if you sell the home or choose to buy out the government voluntarily. There is no ongoing payment tied to the governments stake.

How long does the government keep its Help to Buy share?#

There is no fixed end date. The government retains its share until (a) you sell the home, at which point the government takes its share of the sale proceeds, or (b) you voluntarily buy back the government share (typically at the market value at the time of buy-back). Many participants buy back gradually as their equity and income grow.