Negative equity risk calculator
If house prices fall after you buy, how much breathing room do you have? Compare Help to Buy, a traditional 20% deposit, and the 5% Deposit Scheme under a market drop you choose.
The property
The loan
Minimum 2%. Higher deposit means thicker buffer.
Lender comparison rate.
The market drop
Drag right for a deeper hypothetical drop. The results update live.
In negative equity at a -10.0% price drop
2 of 3 paths
At a -10.0% drop, Help to Buy, 5% Deposit Scheme (FHG) would dip into negative equity. The traditional 20% scenario still holds a buffer.
- Help to Buy
- Short $35,000
- Traditional 20%
- $70,000
- 5% Deposit Scheme (FHG)
- Short $35,000
Each pathway at this drop
The sale price after the drop, less any government share and the loan still owed.
| Pathway | Sale price after -10.0% drop | Government share repaid | Loan owed | Buyer net |
|---|---|---|---|---|
| Help to Buy Negative equity | $630,000 | $189,000 | $476,000 | Short $35,000 |
| Traditional 20% Buyer net | $630,000 | None | $560,000 | $70,000 |
| 5% Deposit Scheme (FHG) Negative equity | $630,000 | None | $665,000 | Short $35,000 |
Negative equity: sale proceeds may not cover the loan, so cash may be needed at settlement to clear the shortfall. A positive buyer net means sale proceeds may cover the loan and leave cash in hand.
Negative equity thresholds
The drop level at which each scenario hits zero buyer equity in year 0. The further from zero, the thicker the buffer.
How the purchase is funded
What proportion of the price comes from you, the government (under Help to Buy), and the loan.
- Buyer $14,000 (2%)
- Government $210,000 (30%)
- Loan $476,000 (68%)
- Buyer $140,000 (20%)
- No government share
- Loan $560,000 (80%)
- Buyer $35,000 (5%)
- No government share
- Loan $665,000 (95%)
Over time
An optional year-by-year view under your own growth assumptions.
Show 10-year projection (optimistic vs pessimistic path)
Project equity year by year under two paths. Optimistic compounds growth from year 0. Pessimistic applies a year-1 downside, then recovers at the same growth rate.
What to watch
- ShortfallHelp to Buy: at -10.0% drop you may be in negative equity by $35,000. You may need to bring cash to settlement to cover the shortfall.
- Shortfall5% Deposit Scheme (FHG): at -10.0% drop you may be in negative equity by $35,000. You may need to bring cash to settlement to cover the shortfall.
- Negative equity thresholds at year 0: Help to Buy at -2.9%, Traditional 20% at -20.0%, 5% Deposit Scheme at -5.0%. The further from zero, the more buffer against a market drop.
- HTB gov share scales with the sale price - the government takes the same proportion of the new price, not the original dollars.
- 5% Deposit Scheme has no LMI cost because the federal government guarantees the high-LVR portion.
- Traditional 20% deposit gives the thickest buffer against a market drop. It costs the most to save.
Real markets are non-linear. This calculation uses your chosen assumptions; it is not a forecast. Selling costs (often 2 to 3% of the price) are not included. Data as of May 2026.
Keep going
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Negative equity explained
For illustration only. This tool does not constitute personal financial advice. Grant amounts, caps, and eligibility rules may change. Federal scheme caps shown are for capital city/regional centres and may differ for other areas. Always verify with your state revenue office and Housing Australia, and consider seeking independent financial advice before making decisions.