In the seven months since its inception, the Victorian Homebuyer Fund has assisted more than 1,100 buyers in purchasing their new homes.

Under the fund, the government provides up to 25% towards the home in exchange for the equivalent stake in equity. 

This means buyers won't be required to pay lenders mortgage insurance (LMI) and only need to save a 5% deposit (rather than the standard 20%).

The Victorian Government has invested more than $170 million into the scheme so far - from the $500 million pledged when the initiative first launched - and there are now approximately 1,900 spots left. 

That said, the Scheme is performing ahead of Victorian Government expectations, with the 2022-23 State Budget target to have 600 homes settled through the fund.

Learn more about how the Victorian Homebuyer Fund works, eligibility criteria, and more.

First home buyers taking the help they can get

In a recent statement, Victorian Treasurer Tim Pallas said 700 of the 1,100 homebuyers under the scheme were first home buyers.

This is against a backdrop of more than 22,000 Victorian first home buyers securing finance from October through March, according to ABS lending data.

He also added that the government provided approximately $245 million in stamp duty benefits and $50 million in first home buyer grants over the first four months of this year.

"The [Victorian Homebuyer Fund] is bringing forward the dream of home ownership for hundreds of Victorians," Mr Pallas said.

"From the shared equity fund to first home owner grants and stamp duty concessions, we’ll keep helping people secure a home of their own."

In addition to the state's shared equity scheme, Victorian first home buyers can access a few other incentives when finding their footing on the property ladder.

To name a few, first home buyers can avoid stamp duty if their home is $600,000 or less, or pay a reduced fee if the home is between $600,000 and $750,000. 

If they buy off the plan, they are only required to pay stamp duty on the land, not the home itself.

The Victorian Government offers a $10,000 First Home Owner Grant (FHOG) when buying or building your first new home.

There are also other shared equity schemes for first home buyers, including Buy Assist and HomesVic.

Could this be good news for Federal Labor?

If Labor wins the upcoming federal election, its proposed 'Help to Buy' scheme could come to fruition.

This shared equity program was modelled off the Victorian Homebuyer Scheme, but with a few tweaks made.

Under the scheme, homebuyers could purchase with as little as a 2% deposit, and the government could contribute up to 40% equity.

Since it would be offered by the Federal Government, it would be open to homebuyers across Australia, with 10,000 spots set to be available. 

ABS data shows there are regularly in excess of 10,000 first home buyer loans written every month.

Victoria's own shared equity scheme's popularity could be a bellwether for the proposed national scheme.

Prime Minister Scott Morrison has been critical of the scheme, and a Liberal-National Government would offer its own scheme to address housing affordability - withdrawing super to build a house deposit - which has in turn also been criticised.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
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$250
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5.69% p.a.
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

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