How much extra should I budget beyond the deposit?

Aim for an extra 5–7% of the purchase price to cover stamp duty, legal fees, inspections, LMI (if your deposit is under 20%), and moving costs. On a $700,000 home, that's roughly $35,000–$50,000 on top of your deposit.

Do first home buyers still pay stamp duty?

It depends on your state and the property value. Most states offer full or partial stamp duty concessions for first home buyers under certain price thresholds. Check your state revenue office website for the latest thresholds.

Can I add LMI to my home loan instead of paying it upfront?

Yes — most lenders let you capitalise LMI into your loan, meaning you borrow the LMI amount and pay it off over the loan term. This reduces your upfront cash needed but increases your total loan and interest over time.

Buying Your First Home? Don't Forget These 5 Costs

Short answer

Yes, the deposit gets most of the attention — but it's only part of the picture. On a typical first home purchase in Australia, you should budget an extra 5–7% of the purchase price for costs like stamp duty, lenders mortgage insurance, legal fees, building inspections, and moving. For a $700,000 home, that's roughly $35,000 to $50,000 you'll need beyond your deposit. Let's walk through each one so nothing catches you off guard.

1. Stamp duty — the big one

Stamp duty is a state government tax on property transfers, and it's usually the largest upfront cost after your deposit. The amount depends on your state and the purchase price.

Here's a rough idea of stamp duty on a $700,000 established home (before any first home buyer concessions):

State	Approx. stamp duty (established home)	First home buyer concession?
NSW	~$27,000	Full exemption up to $800,000
VIC	~$38,000	Exemption up to $600,000; concession to $750,000
QLD	~$20,000	Full exemption up to $700,000 (from June 2025)
WA	~$26,000	Exemption up to $450,000; concession to $600,000
SA	~$32,000	No stamp duty on new homes up to $650,000

If you qualify for a first home buyer concession, your stamp duty bill could drop to zero — but the thresholds vary by state, so check your state revenue office before you start house hunting.

Stamp duty tip

Stamp duty is calculated on the purchase price or the market value — whichever is higher. If you're buying off-the-plan, you may only pay stamp duty on the land value (not the build), which can save thousands.

2. Lenders mortgage insurance (LMI) — the deposit gap fee

If your deposit is less than 20% of the purchase price, your lender will almost certainly require LMI. This one-off insurance protects the lender — not you — if you default on the loan.

How much does LMI cost? It scales with your loan-to-value ratio (LVR). The smaller your deposit, the more you pay:

Purchase price	15% deposit (LVR 85%)	10% deposit (LVR 90%)	5% deposit (LVR 95%)
$500,000	~$3,500	~$6,500	~$12,000
$700,000	~$5,000	~$9,000	~$17,000
$900,000	~$8,000	~$14,000	~$25,000

The good news: most lenders let you add LMI to your loan rather than paying it upfront, which helps with cash flow — but it does mean paying interest on it for the life of the loan.

Ways to avoid LMI

Save a 20% deposit (tough, but the cheapest option)
Get a family guarantee (a parent uses their home equity as security)
Check if your profession qualifies for an LMI waiver (some lenders waive it for doctors, lawyers, and accountants)

3. Conveyancing and legal fees — the paperwork cost

A conveyancer or solicitor handles the legal transfer of the property and makes sure everything is above board. You'll pay for their time plus disbursements (searches, certificates, title registration).

Budget roughly $1,500–$3,000 for a standard residential purchase. This usually covers:

Title search and property certificate checks (~$200–$400)
Contract review and advice
Settlement attendance
Title transfer registration (~$200–$300)

If the property has complexities — like an easement, a granny flat that's not council-approved, or strata complications — expect to pay more.

4. Building and pest inspections — don't skip these

A building and pest inspection costs $500–$1,000 combined and is easily the best money you'll spend during the buying process. An inspection might reveal:

Structural issues (cracks, subsidence, roof problems)
Water damage or mould
Termite activity or past pest damage
Illegal building work or unapproved structures

If the report finds something serious, you can negotiate the price, ask the vendor to fix it, or walk away — all of which can save you far more than the inspection cost.

5. Moving and setup costs — the stuff you forget

This one surprises people. Between removalists, connection fees, and the little things you didn't know you needed, moving into your first home can easily cost $1,000–$3,000.

Item	Typical cost
Removalist (local move, 2-bed)	$800–$1,500
Utility connections (electricity, gas, internet)	$50–$200
Home and contents insurance (first year)	$800–$1,500
Immediate repairs or small renos	$500–$2,000+
Blinds, curtains, light fittings	$500–$2,000+

And then there's the little things you didn't own as a renter — a lawnmower, a ladder, a decent toolbox. They add up fast.

Putting it all together

Let's say you're buying a $700,000 established home in Queensland with a 15% deposit. You're eligible for the first home buyer stamp duty concession, so your stamp duty is $0. Here's what the numbers might look like:

Cost	Amount
Deposit (15%)	$105,000
Stamp duty	$0 (concession applied)
LMI	~$5,000 (can be added to loan)
Conveyancing	$2,000
Building & pest inspection	$800
Moving and setup	$2,000
Total cash needed (excluding deposit)	$4,800
Total cash needed (including deposit)	$109,800

Without the stamp duty concession, you'd need to find another ~$20,000. That's why checking your state's first home buyer schemes before you start looking is essential.

A quick word on government grants

Beyond stamp duty concessions, most states offer First Home Owner Grants (FHOG) for new or substantially renovated homes. These typically range from $10,000 to $30,000 depending on your state and the property. If you're open to a new build or off-the-plan apartment, the FHOG combined with stamp duty savings can make a meaningful dent in your upfront costs.

These five costs won't make buying your first home impossible — but they will catch you out if you haven't budgeted for them. Work through the numbers for your state, your price range, and your deposit size. A good mortgage broker or conveyancer can help you map out the full picture before you sign anything. Knowing what's coming is half the battle.