diff --git a/builtin/init-db.c b/builtin/init-db.c
index c19b35f1e6..2167796ff2 100644
--- a/builtin/init-db.c
+++ b/builtin/init-db.c
@@ -212,8 +212,9 @@ static int create_default_files(const char *template_path,
 	 * values (since we've just potentially changed what's available on
 	 * disk).
 	 */
-	git_config_get_value("init.templatedir", &init_template_dir);
+	git_config_get_pathname("init.templatedir", &init_template_dir);
 	copy_templates(template_path, init_template_dir);
+	free((char *)init_template_dir);
 	git_config_clear();
 	reset_shared_repository();
 	git_config(git_default_config, NULL);
diff --git a/t/t0001-init.sh b/t/t0001-init.sh
index 0803994874..acd662e403 100755
--- a/t/t0001-init.sh
+++ b/t/t0001-init.sh
@@ -186,21 +186,33 @@ test_expect_success 'init with --template (blank)' '
 	test_path_is_missing template-blank/.git/info/exclude
 '
 
+init_no_templatedir_env () {
+	(
+		sane_unset GIT_TEMPLATE_DIR &&
+		NO_SET_GIT_TEMPLATE_DIR=t &&
+		export NO_SET_GIT_TEMPLATE_DIR &&
+		git init "$1"
+	)
+}
+
 test_expect_success 'init with init.templatedir set' '
 	mkdir templatedir-source &&
 	echo Content >templatedir-source/file &&
 	test_config_global init.templatedir "${HOME}/templatedir-source" &&
-	(
-		mkdir templatedir-set &&
-		cd templatedir-set &&
-		sane_unset GIT_TEMPLATE_DIR &&
-		NO_SET_GIT_TEMPLATE_DIR=t &&
-		export NO_SET_GIT_TEMPLATE_DIR &&
-		git init
-	) &&
+
+	init_no_templatedir_env templatedir-set &&
 	test_cmp templatedir-source/file templatedir-set/.git/file
 '
 
+test_expect_success 'init with init.templatedir using ~ expansion' '
+	mkdir -p templatedir-source &&
+	echo Content >templatedir-source/file &&
+	test_config_global init.templatedir "~/templatedir-source" &&
+
+	init_no_templatedir_env templatedir-expansion &&
+	test_cmp templatedir-source/file templatedir-expansion/.git/file
+'
+
 test_expect_success 'init --bare/--shared overrides system/global config' '
 	test_config_global core.bare false &&
 	test_config_global core.sharedRepository 0640 &&