Upfront costs of buying a home in a capital city

We take a look at how much you’ll need to save to buy a house around Australia taking into account additional costs such as stamp duty.

When most people think about saving for a house they just think of the deposit they will need but there are plenty of additional costs that come with getting your foot on the property ladder. These can add tens of thousands to the amount you need to save.

So how much do you need? Canstar crunched the numbers based on the median house price in each capital city around Australia. One scenario assumed you were aiming for a 10% deposit while the other is based on building a 20% deposit. Of course, it may be possible to get into the property market with a deposit of just 5% – and you may not even have to pay Lenders Mortgage Insurance if you qualify for the First Home Loan Deposit Scheme (FHLDS).

The upfront costs the research team considered as part of its calculations are:

Lenders Mortgage Insurance (LMI): LMI protects the lender (not you) in case you default on your loan. Generally, you’ll have to pay LMI if you are borrowing more than 80% of the property’s value but there may be ways to avoid the cost such as using a guarantor. In the hypothetical examples LMI only applies for budding home buyers with a 10% deposit. It is possible to add the cost of LMI to your loan but we have assumed you pay for it upfront.
Stamp duty: One of the biggest costs of buying a home is stamp duty which is a fee imposed by state and territory governments. Concessions may apply for first home buyers but they have not been taken into account for these calculations. Other government fees that will apply are a mortgage registration fee and transfer fee.
Loan application fee: As the name suggests this is a fee for applying for a loan. The fees vary between lenders and some may even waive these fees as part of special promotions.
Conveyancing fee: A conveyancer can help you with the buying process. Their main role will be to review the sale contract and ensure everything is in order.
Building and pest inspection: It’s a good idea to get a building inspection to make sure the home is structurally sound and a pest inspection to check for creepy crawlies that could potentially damage the property.

Upfront costs around Australia

It probably comes as no surprise that Sydneysiders will need to save up the most for a home as Sydney has the highest median price of all the capital cities. You’d need $197,986 for a 10% deposit plus costs or $282,252 for a 20% deposit and other upfront costs.

Melbourne isn’t far behind. Although the median house price in Melbourne is about $278,000 less than Sydney the cost of stamp duty is roughly the same.

Homebuyers in Darwin need to save the least. Not only is the median house price the lowest of all capital cities but so is the stamp duty impost. You’d need a little less than $75,000 for a 10% deposit plus costs or $118,539 for a 20% deposit and costs.

Here’s a look at what you can expect to pay in each capital city. You’ll also be able to see what your loan repayments would be for each scenario.

Brisbane

Brisbane – Median House Price $596,316
	10% Deposit	20% Deposit
Deposit	$59,632	$119,263
Lenders Mortgage Insurance*	$14,653	–
Stamp/Transfer Duty*	$12,688
Mortgage Registration Fee	$195
Transfer Fee	$1,749
Loan Application Fee	$453
Conveyancing Fee	$1,210
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$91,053	$136,031
Loan Amount	$536,684	$477,053
Average Interest Rate	3.51%	3.35%
Monthly Repayments	$2,413	$2,102

Source: www.canstar.com.au – 13/11/2020. Median house price based on the September 2020 Domain House Price Report. LMI cost estimate based on the Genworth LMI Premium Estimator for a non-first home buyer with a loan term of 30 years. Stamp/Transfer Duty, Mortgage Registration and Transfer fee estimates based on the cost as laid out on the applicable State Government website, assuming the home will be the purchaser’s principal place of residence. Average Loan Application Fee based on owner occupier variable products on Canstar’s database, for a loan amount of $400,000, 80% LVR and principal & interest repayments. Average Fee includes application, legal, valuation, settlement and documentation fees. Conveyancing Fee based on the quoted price from Yellow Brick Road Conveyancing. Building & Pest Inspection cost based on the national average of quotes obtained from three providers for a 3 Bed/2 Bath House. *Concessions/discounts for LMI and Stamp/Transfer Duty may be available for first home buyers; these have not been taken into account in these calculations. Average interest rate based on owner occupier variable loans available for the applicable loan amount and LVR, and principal & interest repayments in Canstar’s database; excluding introductory and first home buyer only loans. Monthly Repayment calculations assume a total loan term of 30 years.

Sydney

Sydney – Median House Price $1,154,406
	10% Deposit	20% Deposit
Deposit	$115,441	$230,881
Lenders Mortgage Insurance*	$31,174	–
Stamp/Transfer Duty*	$48,503
Mortgage Registration Fee	$146
Transfer Fee	$146
Loan Application Fee	$453
Conveyancing Fee	$1,650
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$197,986	$282,252
Loan Amount	$1,038,965	$923,525
Average Interest Rate	3.50%	3.33%
Monthly Repayments	$4,665	$4,060

Canberra

Canberra – Median House Price $817,810
	10% Deposit	20% Deposit
Deposit	$81,781	$163,562
Lenders Mortgage Insurance*	$20,095	–
Stamp/Transfer Duty*	$26,206
Mortgage Registration Fee	$153
Transfer Fee	$409
Loan Application Fee	$453
Conveyancing Fee	$1,650
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$131,220	$192,906
Loan Amount	$736,029	$654,248
Average Interest Rate	3.51%	3.34%
Monthly Repayments	$3,309	$2,880

Melbourne

Melbourne – Median House Price $875,980
	10% Deposit	20% Deposit
Deposit	$87,598	$175,196
Lenders Mortgage Insurance*	$21,525	–
Stamp/Transfer Duty*	$47,629
Mortgage Registration Fee	$111
Transfer Fee	$2,137
Loan Application Fee	$453
Conveyancing Fee	$1,210
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$161,136	$227,209
Loan Amount	$788,382	$700,784
Average Interest Rate	3.51%	3.34%
Monthly Repayments	$3,545	$3,085

Hobart

Hobart – Median House Price $555,754
	10% Deposit	20% Deposit
Deposit	$55,575	$111,151
Lenders Mortgage Insurance*	$13,656	–
Stamp/Transfer Duty*	$20,619
Mortgage Registration Fee	$139
Transfer Fee	$212
Loan Application Fee	$453
Conveyancing Fee	$1,210
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$92,337	$134,257
Loan Amount	$500,179	$444,603
Average Interest Rate	3.51%	3.35%
Monthly Repayments	$2,249	$1,959

Adelaide

Adelaide – Median House Price $564,927
	10% Deposit	20% Deposit
Deposit	$56,493	$112,985
Lenders Mortgage Insurance*	$13,881	–
Stamp/Transfer Duty*	$24,905
Mortgage Registration Fee	$173
Transfer Fee	$4,874
Loan Application Fee	$453
Conveyancing Fee	$1,210
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$102,462	$145,073
Loan Amount	$508,434	$451,942
Average Interest Rate	3.51%	3.35%
Monthly Repayments	$2,286	$1,992

Perth

Perth – Median House Price $534,336
	10% Deposit	20% Deposit
Deposit	$53,434	$106,867
Lenders Mortgage Insurance*	$10,307	–
Stamp/Transfer Duty*	$19,399
Mortgage Registration Fee	$178
Transfer Fee	$288
Loan Application Fee	$453
Conveyancing Fee	$1,650
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$86,182	$129,308
Loan Amount	$480,902	$427,469
Average Interest Rate	3.52%	3.35%
Monthly Repayments	$2,165	$1,884

Darwin

Darwin – Median House Price $539,463
	10% Deposit	20% Deposit
Deposit	$53,946	$107,893
Lenders Mortgage Insurance*	$10,406	–
Stamp/Transfer Duty*	$8,102
Mortgage Registration Fee	$149
Transfer Fee	$149
Loan Application Fee	$453
Conveyancing Fee	$1,320
Building & Pest Inspection	$473
TOTAL UPFRONT COSTS	$74,998	$118,539
Loan Amount	$485,517	$431,570
Average Interest Rate	3.52%	3.35%
Monthly Repayments	$2,186	$1,902

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Cover image source: kitzcorner (Shutterstock)

This article was reviewed by our Editorial Campaigns Manager Maria Bekiaris before it was updated, as part of our fact-checking process.

Effie Zahos

Director and Money Commentator InvestSMART

Effie Zahos has dedicated her career to help consumers gain a better understanding of their finances. She is currently 9News Money Editor, where she works across 9News, A Current Affair, Today, and Today Extra, and she is Director and Money Commentator for InvestSMART. She has previously been InvestSMART Chief Content Officer. As one of Australia’s leading personal finance commentators, Effie regularly speaks with media across Australia. Her financial commentary features in many of Australia’s best-known media outlets, including the ABC, news.com.au, the Sydney Morning Herald and the Daily Telegraph. Effie was previously the editor of Money magazine, having helped establish it in 1999. Effie is the author of The Great $20 Adventure, A Real Girl’s Guide to Money and Ditch the Debt and Get Rich. She sits on the board of directors for Ecstra, a not-for-profit organisation committed to building the financial capability of all Australians. You can follow Effie on X, LinkedIn, Instagram or Facebook.