If you have been trying to break into the South Australian property market and finding the deposit hurdle feels impossibly high, you are not alone. But South Australia has something most other states do not - a state-owned lender called HomeStart Finance that has been helping South Australians buy homes since 1989, with a genuine shared equity model that can dramatically reduce what you need to borrow.
By Jason Given · July 2026 · 8 min read
Shared equity is an arrangement where a third party - in this case the South Australian government through HomeStart Finance - contributes a portion of your property purchase price in exchange for a corresponding ownership stake. You live in the home as the owner-occupier, pay a standard home loan on the remaining balance, and when you eventually sell, refinance, or buy out HomeStart's share, you repay the proportion they originally contributed based on the property's value at that time.
HomeStart's Shared Equity Option typically contributes between 5% and 25% of the purchase price. This directly reduces the loan amount you need to borrow, which in turn reduces your required deposit and lowers your ongoing repayments. It is not a grant - HomeStart retains a real financial interest in your property - but it is also not a debt you repay with interest. HomeStart shares in your property's capital growth (and any loss) in proportion to their equity stake.
This model has been running in South Australia for decades, which makes it genuinely battle-tested compared to more recent shared equity pilots introduced by other state governments or the federal government's Help to Buy scheme.
Eligibility requirements include:
HomeStart's lending criteria differ from mainstream banks in some important ways. They do not use Lenders Mortgage Insurance (LMI), and they take a more holistic approach to assessment. This means some borrowers who struggle to qualify with a bank may find HomeStart a better fit.
Let's take a straightforward example to show how the Shared Equity Option changes the equation for a buyer.
These are illustrative figures only. Your actual outcome will depend on interest rates, loan term, and your specific financial situation. Speak with us for a personalised calculation.
The example highlights several key benefits: a lower deposit requirement, no LMI, and meaningfully lower monthly repayments. For many SA buyers, especially those on moderate incomes, this can be the difference between buying now and waiting years to save more.
| Feature | HomeStart (Shared Equity) | Mainstream bank |
|---|---|---|
| Minimum deposit | As low as 3-5% | Typically 5-20% |
| LMI | Not charged | Required under 80% LVR (can be thousands to tens of thousands) |
| Equity sharing | Government retains proportional stake | You own 100% from day one |
| Interest rate | HomeStart's own rate (not always the lowest - compare carefully) | Highly competitive - broad market choice |
| Income limits | Yes - targeted at low to moderate income buyers | None |
| Property price caps | Yes | None |
The trade-off is real. With HomeStart's Shared Equity Option you gain access to the market with a smaller deposit and no LMI, but you give up a portion of your capital growth to the government. Whether that trade-off makes sense for you depends on your timeline, income growth prospects, and how much you value getting into the market sooner. This is exactly the kind of analysis a broker can run with you.
If you have recently completed a tertiary qualification from a recognised SA institution, the HomeStart Graduate Loan offers additional concessions on top of the standard product range. Key features include:
The Graduate Loan recognises that many early-career professionals have strong future earning prospects but have not yet had time to save a large deposit. It is a well-considered product for teachers, nurses, engineers, and other graduates in their first few years of working life.
The Starter Loan is HomeStart's entry-level product designed for buyers with very small deposits. It allows eligible buyers to borrow with as little as a 2-3% deposit without paying LMI. The Starter Loan is structured so that initial repayments are lower, with a stepped increase over the first few years as your income is expected to grow.
This graduated repayment structure is unusual and makes the Starter Loan particularly accessible for buyers who are currently on modest incomes but have realistic prospects of income growth - for example, early-career workers, people returning to the workforce, or those transitioning between roles.
The Starter Loan can sometimes be used alongside the Shared Equity Option, depending on individual circumstances. It is worth getting specific advice on whether combining products makes sense for you.
HomeStart's equity share does not accrue interest - it is not a debt in the traditional sense. However, when you eventually exit the arrangement, HomeStart receives back their proportional share of the property's current value at that time. This means if your property has grown in value, HomeStart's share has grown too.
You can exit HomeStart's equity share in several ways:
Many HomeStart borrowers refinance to a mainstream lender once they have built enough equity and their income has grown sufficiently to qualify. This is often the natural progression - use HomeStart to get into the market, build equity over 5-10 years, then refinance to a competitive market rate. We help borrowers plan this transition and time it well.
South Australia's First Home Owner Grant (FHOG) currently provides $15,000 for eligible first home buyers purchasing or building a new home. The good news is that this can be combined with HomeStart's products, including the Shared Equity Option.
When the FHOG is applied to a HomeStart purchase, it typically reduces the amount you need to contribute as a deposit. This means you can potentially purchase with a very small amount of your own savings when you layer together:
It is worth noting that FHOG eligibility requires the property to be a new or substantially renovated home, and there are purchase price caps. If you are buying an established home, you will not qualify for the FHOG but may still benefit from HomeStart's shared equity model and the state government's other first home buyer support measures.
There is also stamp duty relief available for eligible first home buyers in SA. The combination of FHOG, stamp duty concessions, and HomeStart's shared equity can make SA one of the most supportive environments for first home buyers in the country - if you know how to stack these benefits correctly.
Yes. If you are buying or building a new home and meet FHOG eligibility criteria, you can combine the $15,000 First Home Owner Grant with the Shared Equity Option. The grant reduces your required deposit or borrowing further, making it one of the most powerful combinations available to first home buyers in South Australia.
Yes, HomeStart conducts a credit assessment. However, as a government lender they take a more holistic view than many mainstream banks. Minor credit issues do not automatically disqualify you. The assessment focuses on your current repayment capacity and stability.
You can renovate with HomeStart's approval. Any improvements that increase property value will be reflected when HomeStart's equity share is eventually calculated at sale or buyout. You should seek advice before undertaking major works.
Yes. You can sell at any time. On settlement, HomeStart receives back their equity share percentage of the sale price. The remaining proceeds are yours after repaying the loan balance.
HomeStart does not impose a minimum holding period. However, selling very early when property values have not increased much may mean HomeStart receives a portion of the sale without you having built significant equity first. It is worth modelling this before purchasing.
Yes. You can make additional payments to buy down HomeStart's equity share at any time, subject to valuation. This is a key strategy for borrowers who want to progressively increase their ownership stake as their financial position improves.
HomeStart's Shared Equity Option is genuinely powerful for the right buyer. It tends to work best if you:
It may not be the best fit if you are buying a higher-value property above HomeStart's price caps, have a deposit large enough to qualify for LMI-free borrowing with a mainstream lender, or if your income is above the eligibility thresholds.
The best way to assess this is to run the numbers across both options - HomeStart versus a low deposit mainstream loan, with and without LMI. We do this comparison for our clients as part of our advice process, so you can see exactly what each path costs and what you gain or give up under each scenario.
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