How Help to Buy Closes the Gap for Single Parents Buying Out a Former Partner

Yes, an eligible single parent can use Help to Buy to purchase a former partner's share of a jointly owned home. The scheme's own customer guide names buying out a co-owner as a qualifying exception to the usual rule that applicants cannot already own property.

Where it becomes genuinely useful is when borrowing capacity is the constraint. If you can service a $220,000 loan but you need $387,000 to refinance the existing mortgage and pay out your former partner, the Australian Government can contribute up to 30 per cent of the value of an existing home. That contribution is not a loan and it does not need to be serviced. It is equity, and in the right circumstances it covers the difference exactly.

Why I wanted to write this one

There is a specific conversation I have had more times than I can count. Someone sits down with me after a separation, we run the numbers, and we land on a figure that is thousands of dollars short of what they need to keep the house. They already know what is coming. They have done the maths themselves at two in the morning.

What they usually do not know is that the shortfall is not always the end of the conversation.

So rather than write another general explainer, I want to walk through an actual set of numbers. The figures below are illustrative and rounded, and the circumstances are a composite rather than any one client, but the shape of this situation is extremely common.

The scenario

A single mother with one dependent child, aged 15. She and her former partner own the family home together. The property settlement is agreed and she needs to pay him $60,000 to take his share of the asset pool.

Here is where she stands:

Property value: $580,000 Existing home loan:** $327,000** Equity in the property: $253,000 Payout owed to her former partner:** $60,000** Her maximum borrowing capacity on her income: $220,000

To complete the buyout on a standard refinance, she needs a new loan that covers the existing mortgage plus the payout. That is $327,000 plus $60,000, or $387,000.

She can borrow $220,000.

The shortfall is $167,000.

On a conventional refinance, that is the end of it. There is more than enough equity in the property, but equity is not the problem. Servicing is. No lender will write a $387,000 loan for someone who can service $220,000, and nor should they.

Why is her borrowing capacity only $220,000?

This is the part that catches people out, and it is worth understanding because it is the reason the shortfall exists in the first place.

She receives child support and Family Tax Benefit. Both are real money that lands in her account every fortnight. But most lenders will not count them towards servicing, and it is not because of the amount. It is because of her daughter's age.

Lender policy generally requires an income stream to continue for a minimum period before it can be used in a servicing calculation. Pepper Money's published broker policy is a clear public example: child support and family payments are accepted at 100 per cent on a prime loan "if the customer receives the payment for the next 5 years or more." Below that, the income moves into non-conforming territory, where it is only considered if the applicant can maintain the repayments once the payment ends.

Now apply that to a 15 year old:

Family Tax Benefit Part A runs to age 15, and only continues from 16 to 19 where the child meets full time secondary study requirements. A child support assessment generally ends when the child turns 18 or finishes secondary school in the year they turn 18.

So at 15, there are roughly three years of runway left, not five. Under a common policy setting, both income streams drop out of the assessment entirely.

Here is the part that matters, and it is the reason this scheme fits so well:

The same child is too old for the income to count towards her loan, and still young enough for her to qualify as a single parent under Help to Buy.

The scheme defines a single parent as someone who does not have a spouse or de facto partner and has at least one dependent. Her daughter is still a dependent. The two definitions pull in opposite directions, and Help to Buy sits precisely in the space between them.

Policy varies between lenders on how long an income stream must continue, so this is worth testing across a panel rather than accepting the first answer. But the pattern is consistent enough that a parent of a teenager should expect a materially lower capacity than the same parent with a seven year old.

How does Help to Buy close the gap?

Help to Buy is a shared equity scheme. The government does not lend you money. It buys a share of the home alongside you, and it does not charge you interest or rent on that share.

For an existing home, the government contributes between 5 and 30 per cent of the value. Thirty per cent of $580,000 is $174,000. The gap is $167,000, which is 28.8 per cent.

It fits.

The structure would look like this:

Her home loan: $220,000, which is what she can actually service Government equity share: $167,000, or 28.8 per cent Her own retained equity: $193,000, or 33.3 per cent Total: $580,000

Her former partner is paid his $60,000, she is the sole name on the title alongside the government's interest, and her daughter stays in the same house and the same school.

Her loan is at 37.9 per cent of the property value, so there is no Lenders Mortgage Insurance either.

The repayment difference is the whole point. On a 30 year term at an illustrative 6 per cent, a $387,000 loan costs roughly $2,320 a month. A $220,000 loan costs roughly $1,319. That is about $1,000 a month, and it is the difference between a loan she cannot get and a loan she can comfortably hold. Rates move, so treat those figures as illustration rather than a quote.

Notice how close to the ceiling this is

The gap came in at 28.8 per cent against a 30 per cent limit. That is about $7,000 of headroom.

If the payout had been $70,000 instead of $60,000, the shortfall would have been $177,000, which is above the $174,000 ceiling, and the structure would not work without finding the difference somewhere else.

This is worth knowing before you agree to a settlement figure. The number you sign off on in a family law negotiation directly determines whether this pathway is open to you. That is an argument for running the finance numbers during the negotiation rather than after it.

What does it actually cost her?

I am not going to pretend this is free. It is not.

The government owns 28.8 per cent of the home, and it shares proportionally in the growth. If the property is worth $700,000 when she sells, the government's share is about $201,600 rather than $167,000. At $800,000, it is about $230,300. On that second figure she has given up roughly $63,000 of capital growth.

Against that, she has kept a home she otherwise could not have kept, avoided the cost of selling and re-entering the market, and held onto an asset that is growing in value on the other 71 per cent.

She can also reduce the government's share over time. Partial repayments must be at least 5 per cent of the home's current value, which on $580,000 is $29,000 at a time, priced on a fresh valuation that she pays for. If her income rises later, or the child support arrangement is replaced by something else, buying back down is a genuine option rather than a theoretical one.

There are ongoing obligations attached:

The home must remain her principal place of residence. She must hold full replacement building insurance. She must keep the property in good condition and pay rates, utilities and upkeep. Housing Australia reviews her income at least every five years. Renovations above $21,000, indexed annually, must be notified. If she accepts an offer to sell, Housing Australia is notified immediately.

None of that is heavy. But a government co-owner with reporting obligations is a different thing from owning outright, and some people would genuinely rather borrow less and own all of it. That is a legitimate answer too.

What still needs to be confirmed?

I would rather flag the open questions than pretend this is a solved equation.

The property price cap. At $580,000 this home sits under the cap in most parts of the country, but not everywhere. South Australia outside the capital is capped at $500,000 and regional Tasmania at $550,000. Check the specific postcode.

**Stamp duty. **Transfers between separating couples are often exempt or concessional depending on the state and whether the transfer happens under a formal family law agreement. Ask a conveyancer early, because it is a large number either way.

Which lender. As at late July 2026 there were three participating lender groups: Commonwealth Bank, Bank Australia, and Teachers Mutual Bank Limited, which also trades as Health Professionals Bank, Firefighters Mutual Bank and UniBank. Two of the three allow mortgage brokers to facilitate applications, and that has shifted since the scheme launched in December 2025. Confirm it at the time you apply.

Frequently asked questions

Do I have to be a first home buyer to use Help to Buy?

No. The general rule is that applicants cannot currently own property, but single parents have a specific exception covering buying out a co-owner or selling an existing property. Having owned a home before does not rule you out.

My child is a teenager. Does that affect my eligibility?

Not for the scheme itself. Help to Buy requires at least one dependent, and a teenager in your care is a dependent. It very likely affects your borrowing capacity, because lenders commonly need an income stream to continue for around five years before counting it, and child support and Family Tax Benefit for a 15 year old will not run that long. That is often the reason the gap exists.

What if my income increases later?

The government's share does not grow because you earn more. Housing Australia reviews income at least every five years, and you can make partial repayments of at least 5 per cent of the home's current value at a time to buy the share back down, or repay it in full.

Can I use the 5 per cent Deposit Scheme for a buyout instead?

The Australian Government 5% Deposit Scheme allows single parents and legal guardians a 2 per cent deposit, with no income caps and unlimited places since 1 October 2025, and single parents do not need to be first time buyers. But it is built around purchasing a home rather than acquiring a co-owner's share of one you already own, and the published guidance does not address the buyout scenario. More importantly, it is a guarantee, not a contribution. It does not increase what you can borrow, so it does not solve a servicing shortfall.

Where this leaves you

The reason I wanted to write this one out in full is that the shortfall in this scenario was $167,000. That is not a rounding error. That is the kind of number that makes people decide, quietly and on their own, that keeping the house is not possible.

And it was solvable. Not because of anything clever, but because a policy exists that was written for exactly this situation, and because the numbers happened to land under a ceiling by about $7,000.

It will not always land. Sometimes the payout is too large, or the property is over the cap, or the income sits above the threshold. But whether it lands is a question with an answer, and it takes about an hour to find out. It should not be something you assume your way past.

If you are in the middle of a property settlement, the best time to run these numbers is before the figure is agreed, not after.

If you want to know what keeping the home would actually look like on your numbers, book a discovery call. We will map out Help to Buy, a standard refinance and the 5% Deposit Scheme side by side, so you go into the negotiation knowing what you can actually fund.

Sources and references Help to Buy Scheme Customer Guide, First Home Buyers (Australian Government): https://firsthomebuyers.gov.au/media/1662 Help to Buy Scheme Customer Guide (PDF copy hosted by Commonwealth Bank): https://www.commbank.com.au/content/dam/commbank-assets/home-loans/govt-schemes/htb-customer-guide.pdf Australian Government Help to Buy Scheme, First Home Buyers (Australian Government): https://firsthomebuyers.gov.au/australian-government-help-buy-scheme Help to Buy participating lenders, First Home Buyers (Australian Government): https://firsthomebuyers.gov.au/australian-government-help-buy-scheme/help-buy-tools-and-resources/help-buy-participating-lenders Frequently asked questions, First Home Buyers (Australian Government): https://firsthomebuyers.gov.au/frequently-asked-questions-2 Australian Government 5% Deposit Scheme FAQs, First Home Buyers (Australian Government): https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme/5-percent-tools-and-resources/faqs Family Tax Benefit Part A eligibility, Services Australia: https://www.servicesaustralia.gov.au/family-tax-benefit-part-eligibility Child support when your child turns 18, Services Australia: https://www.servicesaustralia.gov.au/child-support-when-your-child-turns-18 Higher income and property caps unveiled for Help to Buy, The Adviser: https://www.theadviser.com.au/borrower/46855-government-unveils-help-to-buy-details Help to Buy launches 10,000 new places, brings in higher income limits, Broker Daily: https://www.brokerdaily.au/lender/21735-help-to-buy-launches-10-000-new-places-brings-in-higher-income-limits More choices: Help to Buy scheme widens broker access, Australian Broker (28 July 2026): https://www.brokernews.com.au/news/breaking-news/more-choices-help-to-buy-scheme-widens-broker-access-289729.aspx

Scheme settings described in this article are current as at August 2026. Government schemes change, sometimes at short notice, so confirm the current rules with a participating lender or at firsthomebuyers.gov.au before making a decision.

The scenario in this article is illustrative. Figures are rounded and the circumstances are a composite rather than those of any individual client.

This article is general information only. It does not take into account your objectives, financial situation or needs, and it is not credit, legal, tax or financial advice. Before acting on any of it, consider whether it is appropriate for your circumstances and seek advice from a qualified professional. Eligibility for any government scheme is determined by Housing Australia and participating lenders, not by Matilda Tree Finance.

Rielle Berglund is a mortgage broker and the founder of Matilda Tree Finance, working with women navigating life transitions, first home buyers, and self employed Australians with complex income. She is also the founder of Runa, a free financial literacy app for Australian women.

matildatreefinance.com.au | runaapp.com.au

Rielle Berglund (Credit Representative Number 552381) and Matilda Tree Pty Ltd 86642433896 (Credit Representative Number 552382) are credit representatives of Purple Circle Financial Services Pty Ltd ABN 21 611 305 170 Australian Credit Licence Number 486112.