However, it might come as a surprise, especially to first-time homebuyers, to discover that you may need to save up far more than the home deposit.  

There are other upfront costs when buying a home that are important to factor into your budget. Here are the top upfront costs that you need to save up for:

Stamp duty

Stamp duty is a tax you need to pay when buying a home. This is the largest amount you need to save next to your home deposit.

The stamp duty amount will vary depending on a number of factors. These include the location of the property you’re buying, whether it’s an owner-occupied or an investment property, and if you’re a first-time homebuyer or not.

You can use our stamp duty calculator to estimate how much stamp duty you will need to pay. Take note that the result is only a rough estimate. It’s still best to visit your government website for more information.

Conveyancing fees

Conveyancing is the legal process of transferring land title from the previous owner to the new owner. You will need to pay fees to your conveyancer who will review the legal documents, arrange the payment of stamp duty, search the certificate title, prepare the cheques and attend the settlement day on your behalf.

Pest and building inspection

This is optional, but obtaining a pest and building inspection report before buying the property can save you thousands of dollars in unexpected repairs. Doing a pest and building inspection will lessen your chances of ending up with a house full of structural issues or pest infestations.

Lender’s Mortgage Insurance

Paying for Lender’s Mortgage Insurance (LMI) is only required if you borrowed more than 80% of the purchase price. LMI is designed to protect your lender if you default on the loan.

Some lenders allow LMI to be capitalised into your loan, meaning you don’t need to pay LMI upfront. LMI costs thousands but the exact amount will depend on your financial institution.

Home and contents insurance  

Home and contents insurance is necessary from the point of signing the contract. This is before settlement day. The price will vary from property to property and by location.

Moving expenses

Another upfront cost of owning a home is the moving expenses. Of course, this will depend on how much stuff you have and how far you are moving.

Loan application fees

Valuation, establishment, and settlement fees are some of the loan application fees you may need to pay for upfront. The range of fees you will pay will depend on your financial institution.

All of these upfront costs can add up to thousands of dollars. So make sure you save more than the deposit when buying a house.