Upfront costs when buying a home in Australia
Get clear on all the upfront and hidden costs of buying a home in Australia. Learn what to expect before you buy, from deposits to surprise fees.
Buying a home in Australia involves upfront costs beyond the purchase price. These costs can affect how much you need to save before completing a property purchase.
You’ll need to budget for expenses such as stamp duty, legal fees, inspections, and loan-related charges in addition to your deposit.
Understanding what costs may apply can help you plan ahead and avoid unexpected financial pressure.
What upfront costs do you pay when buying a home?
You may need to pay several upfront costs before settlement when buying a home. These are one-off expenses, separate from your ongoing loan repayments.
The main upfront costs may include:
- Deposit - an upfront payment made when purchasing a property, usually calculated as a percentage of the purchase price, which may range depending on the lender, loan type and your circumstances (for example, some lenders may require higher deposits than others)
- Stamp duty (transfer duty) - a government charge based on the property, location and your eligibility for concessions
- Conveyancing and legal fees - cover contract review, title searches and settlement processes
- Building and pest inspections - assess the property’s condition before purchase
- Loan-related costs - may include application, valuation or settlement-related fees depending on the lender
- Lenders Mortgage Insurance (LMI) - may apply depending on your deposit and loan structure
- Mortgage registration and transfer fees - government charges to register the mortgage and transfer the property title (varies by state)
Each cost contributes to the total amount required to complete the purchase.
What is a deposit when buying a home?
A deposit is an upfront payment you make when purchasing a property, usually when contracts are exchanged.
It is typically calculated as a percentage of the purchase price, depending on the lender and loan type. The deposit forms part of the total purchase price and is not an additional cost.
Deposit example (illustrative only)
This is a simplified example for illustration only. Actual deposit amounts depend on the property price and your circumstances.
On a $750,000 property:
- A 20% deposit = $150,000
- A 10% deposit = $75,000 (but you’ll likely need to pay LMI)
What is stamp duty?
Stamp duty (also called transfer duty) is a government charge you pay when purchasing property.
The amount depends on factors such as the property, location and your eligibility for any concessions or exemptions.
Stamp duty is often one of the larger upfront costs and is usually paid at settlement.
Because rules and thresholds can change, it’s best to check your state or territory revenue office or use a calculator to estimate your specific cost.
What grants and concessions can reduce upfront costs?
Government programs may be available to help eligible buyers reduce upfront costs.
These may include grants, concessions or schemes that support buyers with lower deposits or reduced government charges. Eligibility, availability and conditions vary and may change over time. It’s important to check the latest information with the relevant government authority.
Please note that Unloan does not participate in any government grants, concessions or schemes.
What is a holding deposit?
A holding deposit is a smaller upfront payment that may be made before contracts are exchanged to show intent to purchase a property.
If the purchase proceeds, the holding deposit is usually applied toward the purchase price.
If the purchase does not proceed, whether the deposit is refunded depends on the terms of the agreement and applicable regulations.
What are building and pest inspection costs?
Building and pest inspections check the condition of a property before you buy. They may identify structural issues or risks that could affect the property. Costs can vary depending on the property and provider.
These inspections are optional but may help inform your decision before proceeding with a purchase.
What are conveyancing and legal fees?
Conveyancing fees cover the legal work required to transfer property ownership. A conveyancer or solicitor may review contracts, conduct searches, prepare documents and manage settlement.
Fees can vary depending on the provider and complexity of the purchase.
What loan-related costs may apply upfront?
Some lenders may charge upfront costs when setting up a home loan.These may include application, valuation or settlement-related fees.
Costs and inclusions vary depending on the lender and loan product. With Unloan, there are no application or ongoing fees.
What is Lenders Mortgage Insurance (LMI)?
Lenders Mortgage Insurance (LMI) is a one-off insurance premium you may need to pay if your deposit is less than 20% of the property’s value. LMI helps protect the lender, not you, but it may allow some buyers to purchase with a smaller deposit without saving a full 20% deposit.
LMI may be paid upfront or added to the loan, depending on the lender and product.
What insurance do you need when buying a home?
Lenders may require building insurance to be in place before settlement. This helps protect the property, which is used as security for the loan.
Insurance costs can vary depending on the property, location and level of cover. You may also choose to take out additional cover depending on your circumstances.
What costs apply when buying at auction?
Buying at auction has different requirements compared to a private sale.
These may include:
- Deposit on the day - you may need to pay a deposit (often around 10% of the purchase price) shortly after a successful bid
- No cooling-off period - properties purchased at auction generally do not have a cooling-off period in Australia. Cooling-off rights may also not apply to properties purchased shortly before or after an auction, depending on the timing, contract and circumstances
- Finance arranged in advance - you may need to have your finance in place before auction day, as conditions can vary depending on the contract
- Pre-auction inspections - building and pest inspections may need to be completed before the auction
Auction conditions can vary. You may wish to have your conveyancer review the contract and your finance arranged before you bid.
What are the hidden costs of buying a home?
In addition to standard upfront costs, other expenses may arise when buying a home. These may include moving costs, utility connections, furniture, repairs and ongoing property-related expenses.
Costs can vary depending on your situation. Planning for additional expenses may help reduce the risk of unexpected costs.
How can you prepare for upfront home buying costs?
The best way to avoid surprises is to estimate your total upfront costs early, before you start inspecting properties.
- Consider setting a savings target that includes your deposit plus additional upfront costs beyond your deposit
- Consider using a stamp duty calculator to estimate your biggest variable cost
- Check your eligibility for first home buyer grants and stamp duty concessions in your state
- Consider getting pre-approval to get a better understanding of your borrowing capacity
- Consider budgeting for post-purchase costs like moving, furniture, and initial repairs.
Estimating borrowing capacity and costs before buying
Knowing how much you can borrow can help you set a realistic property budget and estimate your upfront costs.
Use Unloan’s borrowing power calculator to see how much you could borrow based on your income, expenses, and financial commitments. Then use the repayment calculator to estimate your monthly repayments.
Unloan is a division of Commonwealth Bank of Australia.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Unloan is a division of Commonwealth Bank of Australia, and Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions are found on our Unloan Terms and Conditions. Modified Terms and Conditions will be set out in our Notice of Variation Agreement, if you are approved. This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.
