Could 2% Get Your Child Into a Home?

For families with kids who are finding it difficult to enter the property market, the government's Help to Buy scheme is one option that may be available. The scheme allows eligible buyers to purchase a property with a deposit as low as 2%, while the remaining funds are still primarily obtained through a mortgage, similar to a standard property purchase. The government can then help cover a portion of the purchase price, contributing up to 40% of the property's value to reduce the amount the buyer needs to borrow. However, it's important to understand that this contribution is not free money and does need to be repaid in the future. The government's 40% contribution represents a share of the property's equity, meaning that as the property increases in value over time, the government's share increases as well. For example, if the government originally contributed $200,000 towards the purchase, that amount may grow if the property value rises. When the property is sold, the government would be entitled to receive its 40% share of the property's value at that time. Understanding how shared equity works is essential before deciding whether the Help to Buy scheme is the right option for your circumstances. General advice only. Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).

Disclaimer || The information provided in this post is general in nature only and does not constitute personal financial advice. Amy Lehmann is an Authorised Representative(No. 1292710) of AFSL 495401.