Government raises Help to Buy scheme price caps

First home buyers can expect more assistance this year through the federal government’s Help to Buy scheme. However, they may need larger deposits than they initially planned to buy more expensive homes. Under the scheme, a worker earning $100,000 can co-purchase a property with the government. To qualify, they must contribute at least a 2 percent deposit. The government covers 30 percent of the home’s cost, or 40 percent for new builds. The new changes allow buyers to purchase more expensive homes. In Sydney, the cap is now $1.3 million, while it’s $950,000 in Melbourne, $1 million in Brisbane, and $850,000 in Perth. Despite these changes, banks may not lend enough for buyers to fully utilize the scheme with a 2 percent deposit. Current interest rates may affect lending decisions significantly.