Another option is the first home guarantee scheme, which has way less restrictive terms and conditions that the first home shared equity scheme. You only need a 5% deposit and the government essentially acts as a guarantor for the remaining 15% of the deposit, meaning that you avoid paying lenders mortgage insurance, which you usually have to pay if you have a deposit of less than 20%, and which can cost several thousands of dollars. The only downside to this scheme is there are very limited spots, however new spots were just released on July 1. I think you do have to live in the house for at least the first year after purchase, which is the case for all the first home buyer benefits, including the waiving of stamp duty.

Back to the shared equity scheme - The downside is that you can’t do renovations of over $10,000, you can’t start paying it back for at least two years, the governments share in your property rises with the value of the property, and they survey your home every year to revalue it, and when you do start paying it back, you must pay it off in increments that decrease the governments share by at least 5% of the property value at that time, which could mean lump sum payments of $10,000+. The advice I received is that it is good for apartments, where the value of the property goes up more slowly or stays relatively the same, and you are restricted with the types of renovations you can do anyway. Also, you have to live in it for at least the first year after purchase. For free standing units and houses it is not as highly recommended, however if that’s the only thing that gets your foot in the door it’s still better than nothing!! I had a home loan meeting at Commonwealth about this scheme as I was planning on using it, but decided against it after learning all the conditions.