So, you’ve been saving for your deposit, hustling hard, skipping bottomless brunches, and watching house prices climb. But then someone mentions stamp duty, or Lenders Mortgage Insurance (LMI), and suddenly the goalposts shift.
For first-home buyers in Australia, it’s not just about how much you can save; it’s about how much you didn’t realise you’d need. Let’s unpack the hidden costs of buying a house and how to plan ahead and better understand potential costs involved.
It’s More Than Just a Deposit
Many buyers focus primarily on saving a deposit, often in the 10–20% range. And while that’s a big part of the equation, it’s only one piece. On top of your deposit, you’ll also need to cover:
- Stamp duty: This can range from several thousand to tens of thousands, depending on your state, property value, and eligibility for exemptions or concessions
- Lenders Mortgage Insurance (LMI): If your deposit is less than 20%, you’ll likely be charged LMI — which protects the lender, not you
- Conveyancing and legal fees: Costs can vary, but may include approximately $1,200–$2,500 for a solicitor or conveyancer, and around $400–$800 for inspections, depending on the provider and location
- Building and pest inspections: Around $400–$800 to ensure the property isn’t hiding structural or pest problems
- Loan application and setup fees: Not all lenders charge these, but it’s worth confirming
- Insurance and moving costs: Building insurance is mandatory by settlement, and then there’s everything from truck hire to utility connections
All up, these additional costs may add a significant amount to the total purchase cost, depending on the property and location.
Why These Costs Catch Buyers Off Guard
First-time buyers often search things like:
"How much is stamp duty in NSW?""What are hidden costs when buying a house?""How much should I budget for buying my first home?"
Why? Because these costs aren’t always obvious, especially when listings and mortgage calculators just focus on the property price. It’s a common frustration echoed in forums and surveys that many buyers say these costs aren’t obvious early in the process.
Budgeting Smarter (Without Panic)
The good news? You can prepare, and avoid last-minute stress, by factoring these extras in early. Once you know your ideal property price, reverse-engineer your budget to include:
- Allowance for additional upfront costs beyond the deposit
- Government grants and exemptions you might qualify for, like first-home buyer stamp duty relief
- A realistic idea of your Loan-to-Value Ratio (LVR) and whether you’ll need to pay LMI
A mortgage broker can explain how lenders typically assess these costs as part of a loan application. Better still, our free e-book includes all the checklists and calculators you need to run the numbers yourself.
Don’t Let Surprise Costs Derail Your Dream
You’ve worked hard to save, don’t let "gotcha" costs catch you off guard. Planning ahead can help you better understand the process and potential costs involved.
Download the First Home Buyer e-book now, a practical guide designed to help first-home buyers understand common costs and considerations. This isn’t just another guide, it’s your toolkit for making smarter decisions, backed by expert knowledge and compliant with Australian lending and consumer protections.
