Brighter Buying

How can Brissie first home buyers save $1400 per month on their mortgage?

by Kate Watt, Marketing Manager 14 September 2023

Recent media reports are sharing more details on the Australian Government’s Help to Buy scheme due to kick off next year.

If your goal is to slash your mortgage repayments then the figures look very attractive indeed.

But there is one very big difference between this scheme and others.

The Help to Buy scheme is a shared equity arrangement, explains Domain. This essentially means you’re purchasing part of your home with government funds. In fact the government will pay up to 30 or 40 per cent of the purchase price. This slashes the amount you borrow and therefore your mortgage repayments. But it also means the government has a 30 to 40 per cent equity stake in your home that you pay back over time or when you sell it. So any future sale proceeds are split with government. If your goal is to maximise your future gains, this is probably not the scheme for you.

But if want stable and affordable housing, it’s worth taking a closer look.

For Brisbane first timers the Help to Buy scheme purchase price limit is $700,000. That would mean that with a 5% deposit, and the government chipping in 30%, your mortgage repayments would be just over $2,642 per month, compared to $3,861 if you purchased through the First Home Guarantee scheme, according to Canstar analysis.

Canstar group executive financial services Steve Mickenbecker said buyers need to be well informed about the upsides and downsides of the program.

“I think buyers will go into this clear eyed. They’ve got to,” he said. “You’ve got to say to yourself: OK this gets me into the property I want now, repayments I can afford now and a toehold into the property market. But the time will come when I will sell or up-trade and I won’t have the money I would have otherwise.”

Wanting to get on the property ladder? Contact us for a chat or view our current listings for sale.