See how much property prices would need to fall before your equity position becomes negative under Help to Buy, the First Home Guarantee 5% deposit scheme, and a traditional 20% deposit. The comparison helps illustrate the downside exposure that comes with each low-deposit or equity-sharing approach.

What is negative equity?

Negative equity is when the sale price of a home (minus any shared-equity share repaid to government) is less than the loan still owed. If you sell at this point, you may need to bring cash to settlement to clear the gap.

How does Help to Buy's shared equity affect the math when prices fall?

Help to Buy gives you a smaller loan because the government owns a slice of the property (40% on new builds, 30% on existing). When you sell, the government takes the same proportion of the sale price, not the original dollars. That means the government share also shrinks if the price falls, which softens the impact on your buyer net position compared to a traditional high-LVR loan at the same price drop.

Why does the 5% Deposit Scheme have a different risk profile?

The 5% Deposit Scheme uses a government guarantee, not shared equity. You still borrow about 95% of the price, so the loan owed is large relative to the property value. A small price drop can quickly leave you in negative equity because there's no government share at sale to share in the loss.

Is the projection a forecast?

No. The projection is assumption-driven. You choose the growth rate and the year-1 downside, and the chart applies those numbers compounded. Real markets move non-linearly, so treat this as a sensitivity check, not a prediction.

Can I get out of Help to Buy if prices drop?

Help to Buy contracts include a 90-day exit window in some circumstances, but the rules are scheme-specific. If you sell, the government takes its proportional share of the sale price even when that price has fallen. Confirm the contract terms with the scheme administrator before relying on any exit pathway.

What's the difference between this and the scheme comparison tool?

The scheme comparison tool models the upside - what each scheme costs and saves under normal market conditions. This tool models the downside - what happens to each scheme if the market drops between purchase and sale.

Does the calculator account for sale costs (agent fees, marketing, conveyancing)?

Not in this version. Selling a property typically costs 2-3% of the sale price in agent commission plus advertising and legal fees. To be conservative, mentally deduct another 3% from the buyer net figure shown here.

Is this financial advice?

No. This is general information, not financial advice. See the disclaimer for the full statement.