First Home Buyer Costs in Australia

Buying your first home is exciting, but the purchase price is only one part of the total cost.

Many first home buyers focus on saving the deposit, then later discover there are several other costs to allow for before settlement.

This guide explains the common costs first home buyers in Australia should think about before making an offer.

It is general information only. Costs vary by state, property type, lender, buyer type and personal circumstances.

The deposit

The deposit is usually the first major cost buyers think about.

A deposit is the amount of your own money you contribute towards the property purchase.

For example:

• Property price: $750,000
• Deposit: $150,000
• Loan amount before costs: $600,000

In this example, the buyer has a 20% deposit before allowing for purchase costs.

Some buyers purchase with less than a 20% deposit, but this may increase the loan-to-value ratio and may trigger lenders mortgage insurance.

Use the PurchaseWise Property Purchase Calculator to work through deposit and loan scenarios.

Stamp duty

Stamp duty is one of the largest upfront costs when buying property in Australia.

The amount can vary depending on:

• The state or territory
• The property price
• Whether the property is new or established
• Whether the buyer is a first home buyer
• Whether any concession or exemption applies
• Whether the property is owner-occupied or investment

Some first home buyers may qualify for concessions, grants or exemptions, but the rules change and differ across Australia.

Always check the current rules with the relevant state or territory revenue office before relying on an estimate.

Related guide: Stamp Duty Explained in Australia

Lenders mortgage insurance

Lenders mortgage insurance, often called LMI, may apply when the borrower has a smaller deposit.

It is insurance that protects the lender, not the borrower, if the borrower defaults and the lender suffers a loss.

LMI is commonly associated with loans above 80% loan-to-value ratio, although lender policies can vary.

For first home buyers, LMI can be confusing because it may allow a purchase to happen sooner, but it also adds to the overall cost of buying.

Related guide: Lenders Mortgage Insurance Explained

Loan application and lender fees

Some lenders may charge upfront loan fees.

These may include:

• Application fees
• Settlement fees
• Valuation fees
• Package fees
• Documentation fees
• Annual package fees

Not every lender charges the same fees. Some may waive certain fees as part of a promotion or package.

When comparing loans, first home buyers should compare the overall loan structure, not just the interest rate.

Mortgage repayments

Once the loan settles, mortgage repayments become one of the main ongoing costs.

Repayments depend on:

• Loan amount
• Interest rate
• Loan term
• Repayment frequency
• Principal and interest or interest-only structure
• Loan fees
• Extra repayments, if any

Use the PurchaseWise Mortgage Repayment Calculator to test different loan amounts, interest rates and repayment frequencies.

Conveyancing or settlement agent fees

Most buyers use a conveyancer, solicitor or settlement agent to handle the legal and settlement process.

They may help with:

• Reviewing contract documents
• Checking title details
• Managing settlement requirements
• Liaising with the lender
• Calculating adjustments
• Completing transfer documents
• Coordinating settlement

Fees vary depending on the provider, state, property type and complexity of the transaction.

Building and pest inspections

For established homes, many buyers arrange building and pest inspections before settlement or as part of contract due diligence.

These inspections can help identify issues such as:

• Structural movement
• Roof problems
• Moisture damage
• Termite activity
• Plumbing or drainage concerns
• Electrical concerns
• Safety issues
• Poor renovations or maintenance problems

An inspection cannot guarantee that every issue will be found, but it can help buyers make a more informed decision.

Strata report or strata records

If buying an apartment, unit, townhouse or villa in a strata scheme, buyers may need to review strata records.

These may show:

• Strata levies
• Special levies
• Building insurance
• Maintenance issues
• Disputes
• Meeting minutes
• Reserve funds
• By-laws
• Planned works

Strata costs can have a major effect on affordability, so they should not be ignored.

Insurance

Buyers may need to arrange insurance before settlement.

This may include:

• Building insurance
• Contents insurance
• Landlord insurance, if investing
• Income protection, where appropriate
• Life or mortgage protection insurance, where appropriate

Insurance requirements can vary depending on the state, lender and contract. Buyers should check their obligations before settlement.

Council rates and water rates

At settlement, rates and charges are often adjusted between the buyer and seller.

This may include:

• Council rates
• Water rates
• Strata levies
• Land tax adjustments, where relevant
• Other property outgoings

The buyer may need to reimburse the seller for amounts already paid beyond the settlement date.

Moving costs

Moving costs can include:

• Removalists
• Packing boxes
• Storage
• Cleaning
• Utility connections
• Mail redirection
• Furniture
• Appliances
• Repairs
• Gardening equipment

These costs can add up quickly, especially for buyers moving from a rental or buying a larger home.

Immediate repairs and maintenance

A first home may need money spent soon after settlement.

Common early costs include:

• Changing locks
• Minor plumbing repairs
• Electrical repairs
• Painting
• Window coverings
• Flooring repairs
• Garden cleanup
• Security upgrades
• Appliance replacement

Buyers should avoid using every available dollar on the deposit if it leaves no buffer for repairs or emergencies.

A simple first home buyer example

A first home buyer purchasing a $750,000 property may need to consider:

• Deposit
• Stamp duty or concession eligibility
• Lender fees
• LMI if deposit is under 20%
• Building and pest inspection
• Settlement agent or solicitor
• Insurance
• Moving costs
• Utility connections
• Immediate repairs
• Emergency buffer

The total amount needed can be noticeably higher than the deposit alone.

Why a buffer matters

A savings buffer is important because unexpected costs can appear before and after settlement.

Examples include:

• Higher settlement adjustments
• Inspection issues
• Loan approval conditions
• Moving delays
• Repairs after moving in
• Furniture or appliance needs
• Rate changes

A buffer can reduce stress and help avoid relying on credit cards or personal loans after settlement.

Common mistakes first home buyers make

Mistake 1: Saving only for the deposit. The deposit is important, but it is not the only upfront cost.

Mistake 2: Forgetting stamp duty. Stamp duty can be a major cost unless an exemption or concession applies.

Mistake 3: Assuming grants apply automatically. First home buyer grants and concessions have eligibility rules. Always check the current requirements.

Mistake 4: Ignoring ongoing costs. Owning a home includes rates, insurance, maintenance, utilities and repairs.

Mistake 5: Buying at the maximum budget. The maximum a lender may approve is not always the amount that feels comfortable in real life.

Final thoughts

First home buyers should look beyond the deposit and think about the full cost of buying.

A good starting point is to estimate the purchase price, deposit, loan amount and key buying costs before making an offer.

Use calculators as a guide, then speak with a mortgage broker, lender, conveyancer, settlement agent or other qualified professional before signing a contract.

Related guides

• How Much Deposit Do You Need?
• Understanding LVR and LMI
• Costs Involved When Buying Property in Australia
• Settlement Costs and Timeline in Australia

Important disclaimer

This guide is general information only. It is not financial, credit, legal or tax advice. Costs, grants, concessions and lending rules can change. Always confirm your position with the relevant government authority, lender, broker, solicitor, settlement agent or qualified adviser.