The Costs First Home Buyers Forget Beyond the Deposit
29 April 2026
Most first home buyers know they need a deposit. Far fewer budget accurately for everything that sits on top of it. The gap between what they expect and what they actually need can run to $20,000 or more before the keys are handed over.
Stamp Duty: Still the Biggest Surprise for Most Buyers
Stamp duty, also called transfer duty in some states, is a state government tax on the purchase of property. For a $700,000 home in New South Wales, the stamp duty bill for someone who does not qualify for a first home buyer concession is approximately $26,700. In Victoria, it sits around $37,000 on the same price point. These are not small numbers, and they are due at or near settlement.
The good news is that every Australian state and territory offers concessions or exemptions for eligible first home buyers. In NSW, properties under $800,000 attract a discounted rate or full exemption depending on the value and whether it is a new or established home. Victoria offers exemptions on homes up to $600,000 and a reduced rate up to $750,000. Queensland, Western Australia, and South Australia have their own thresholds. The eligibility rules vary, so it is worth confirming your position with a broker or conveyancer before assuming you qualify.
Conveyancing and Legal Fees
Conveyancing is the legal process of transferring property ownership. You will need a licensed conveyancer or solicitor to handle this. In most states you cannot legally settle a property purchase without one. Costs typically range from $1,200 to $2,500, depending on the complexity of the transaction and the professional you use.
This fee covers reviewing the contract of sale, conducting title searches, liaising with the seller's legal representative, and attending to the financial settlement. Some buyers try to reduce this cost by using low-cost online conveyancing services. These can work for straightforward purchases, but for anything involving a strata title, easements, or special conditions in the contract, having an experienced local conveyancer is worth the extra cost.
Building and Pest Inspections
A building and pest inspection is an assessment of the property's physical condition, conducted before you commit to the purchase. It identifies structural issues, moisture damage, termite activity, or anything else that might affect the value or safety of the home. The cost varies by property size and location but typically falls between $400 and $800 for a combined report.
Buyers sometimes skip inspections to save money or to move quickly in a competitive market. This is a risk that occasionally pays off and occasionally does not. A missed termite issue in a timber-framed home can cost tens of thousands of dollars to rectify. The inspection fee is one of the cheaper items on the list, and one of the more consequential decisions about whether to spend it. A qualified building inspector can assess what is actually relevant for your specific property type and location.
Can I use my First Home Super Saver Scheme balance for these costs?
The First Home Super Saver Scheme (FHSSS) allows eligible first home buyers to withdraw voluntary super contributions of up to $50,000 from 1 July 2022, to put toward a property purchase. The funds can be used for any part of the purchase, including upfront costs beyond the deposit, provided the property qualifies under the scheme rules. A financial adviser or your super fund can confirm eligibility and the withdrawal process for your situation.
Loan Fees and Lenders Mortgage Insurance
Most lenders charge an application or establishment fee when you take out a home loan. These typically range from $0 to $600, though some lenders waive them entirely as part of their product offering. There is also a mortgage registration fee charged by the state government to register the lender's interest over the property, usually between $100 and $200 depending on your state.
If your deposit is below 20% of the purchase price, most lenders will require lenders mortgage insurance (LMI). LMI protects the lender, not the borrower, in the event of default. On a $700,000 purchase with a 10% deposit ($70,000), LMI can add $12,000 to $18,000 to the cost of the loan. It is typically capitalised onto the loan balance rather than paid upfront, but it increases the total amount borrowed and therefore the interest paid over the loan's life. Government-backed schemes such as the First Home Guarantee allow eligible buyers to purchase with a 5% deposit without paying LMI, by having the government act as guarantor for part of the loan.
Moving Costs and a Buffer You Will Actually Need
Removalist costs for a standard two-bedroom move within the same city typically run $800 to $2,000 depending on distance and volume. Interstate moves can cost significantly more. Then there are connection fees for utilities, any immediate repairs or cosmetic work, and the purchases most buyers make in the first weeks of ownership, including appliances, window coverings, and garden tools, that accumulate quickly.
A practical approach used by many brokers is to build a 1% to 1.5% buffer of the purchase price into your total savings target, above and beyond the deposit and known upfront costs. On a $700,000 property, that is $7,000 to $10,500 set aside for the things you cannot fully anticipate. It is not a precise science, but buyers who arrive at settlement with no buffer frequently find the early months of ownership financially stressful in ways that could have been avoided.
Typical upfront costs: $700,000 purchase, NSW, 10% deposit
Key Takeaways
- Upfront costs beyond the deposit on a $700,000 purchase can range from $10,000 to over $60,000 depending on your deposit size, state, and eligibility for concessions.
- Stamp duty is typically the largest single cost after the deposit, and the one most first home buyers underestimate. Every state has different thresholds and concession structures.
- Lenders mortgage insurance applies when your deposit is below 20% and can add $12,000 or more to the cost of the loan. Government guarantee schemes can allow eligible buyers to avoid it.
- Building and pest inspections are an upfront cost that can prevent far larger unexpected expenses after settlement.
- A buffer of 1% to 1.5% of the purchase price, held separately from the deposit, helps absorb the costs that cannot be precisely calculated in advance.
Understanding exactly what you need to save, and in what order, is one of the most useful things a broker can help you work through before you start actively searching. If you are planning your first purchase, book a chat with the JRW Finance team at jrwfinance.com.au/meet, or follow us on TikTok, Instagram, and Facebook.
