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Home loan guide / Buying a home

What it costs upfront to buy a home

2 min read

Laura Osti

It’s not just the deposit you’ll need to cover when you buy a home. There’s a bunch of other fees and charges – including stamp duty – which get bundled into the costs you need to pay, upfront.

When saving up for a home loan you may just be thinking about putting money aside for a deposit. This is a good start, but there are a few other upfront costs that you’ll need to account for when saving up for a home loan. You’ll need to consider covering the cost of some fees and Government charges as well.

You'll need to consider things like

  • Lenders’ Mortgage Insurance (LMI),
  • Stamp duty,
  • Mortgage registration and title transfer fees,
  • Application, processing, and settlement fees (depending on your lender - Tic:Toc doesn't charge these),
  • Valuation fees; and
  • Conveyancer fees.

These fees and charges can all take a chunk out of that little nest egg you’ve saved up, leaving you with less than you thought for your deposit. If this all sounds a little overwhelming, that’s ok, we’ll break it all down for you.

Each state has different fees associated with purchasing a home, so the exact cost you need to cover will differ depending on where you live. Your best bet is to check with your State Government to see what they charge and get an exact figure.

But to give you a general idea of how it works and what you’ll be charged for, here are the upfront costs if you're looking to buy a $700,000 home in Melbourne (or you can skip the math and just use a calculator).

The deposit

This is the obvious one you’ve probably already thought about. Most lenders will ask for at least 5% of the value of the property, which in this case would be $35,000. But, anything less than a 20% deposit, and you’ll be charged Lenders’ Mortgage Insurance (see below). In this scenario, a 20% deposit would be $140,000.

Lenders’ Mortgage Insurance (LMI)

If you have less than a 20% deposit you’ll probably need to cover the cost of LMI. This is a one-off insurance payment, which protects the lender in case you can’t make your repayments. A smaller deposit means your lender needs to give you more money, so there is a cost associated. Although an additional cost to the lending process, it can be a great mechanism to get purchasers into a home quickly without having to save the 20% deposit, this makes LMI handy even if you aren’t a first home buyer. With Tic:Toc, you only need a 10% deposit or equity (for loan amounts over $2M, investment properties, and interest only loans you’ll need at least 15%) to be eligible for a home loan.

Stamp duty

This is a State Government tax based on the purchase price of the property. Each state and territory has different rules and calculations, and it’s unavoidable. For your $700,000 established home in Victoria, your stamp duty will be around $37,000. You can work out your estimated stamp duty amount using our calculator.

StateCost of Stamp Duty, based on a $700,000 existing property to live in (and a second/next home buyer)
Australian Capital Territory$17,880
New South Wales$26,590
Northern Territory$34,650
South Australia$32,330
Western Australia$27,265
This data is current as at 22 November, 2022.

Registration of Mortgage and title transfer

This is the cost of registering the land title with your State Government and transferring to your name, and unfortunately it’s mandatory. In Victoria, together these fees will cost you around $1,800.

StateRegistration of mortgageTitle transfer
Australian Capital Territory$160$429
New South Wales$154.20$154.20
Northern Territory$156 (+ $59 for each additional C/T after the first) $156 (+ $59 for each additional C/T after the first)
Queensland$208.83Based on consideration (purchase price)
South Australia$179Based on consideration (purchase price)
Victoria$114.40Based on consideration price (purchase price), and fees differ depending on paper or PEXA transfer)
Western Australia$187.60Bases on consideration (purchase price)
This data is current as at 8 November, 2022.

Loan application, processing, and settlement fees

These are the fees your lender will charge for applying and settling a home loan with them. It covers all the work the humans do, like filling out paperwork and meeting you for a loan interview. And it can cost you around the $800 mark. Tic:Toc doesn’t charge this. Zip, nada, zilch. We absorb this fee because we believe that, contrary to popular belief, applying for a home loan should be uncomplicated and automated.

Valuation fee

This is a fee your lender will charge you to arrange an independent valuer to assess the dollar value of the property you’re planning to buy, based on the current market. A property value will change over time, so you may get hit with this every time you ask for a valuation. With many thanks to our Automated Valuation Model (AVM), we have this process automated so you don’t have to pay a thing. And it gets updated in real-time, every day, so anytime you apply it will always be current. Kapow.

Conveyancer fees

Your conveyancer will charge you to prepare your loan documents (such as the contract of sale and memorandum of transfer) and to liaise with your lender and existing property owner on your behalf. It’s in your best interest to appoint someone to ensure you’re protected and legally safe. But it’s not legally required. Costs can vary based on the complexity of the loan you're taking out, but it’s around the $1000 mark. And generally worth every cent.

You can learn more about the different types of home loan fees in our ‘Understanding home loan fees’ home loan guide.

So, what's the damage?

With Tic:Toc, this is how much you'll need upfront to buy your $700,000 established home in Victoria:

What you'll need upfront
Deposit (20%)$140,000
Stamp duty$37,070
Mortgage title and transfer$1,864

Already a homeowner?

If you're looking at buying an additional property and you have home equity, you may be able to use this towards your upfront costs. If you're looking to refinance your current home loan and want to understand the potential costs involved, we've got a home loan guide for that too.

If you want to double check your figures, you can use our upfront cost calculator to quickly find out what sort of costs you'll need to pay.

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