Stamp Duty, Conveyancing, Inspections, Insurance, Moving Costs: The Full Picture for First Home Buyers

Plenty of first home buyers obsess over the deposit, then get blindsided by the rest of the bill. Fair enough too. The deposit is the loudest number in the room, but it is not the only one lurking there with a knife and fork.

Once you get serious about buying, the real upfront cost usually becomes deposit plus a stack of extras. Stamp duty can be enormous if you do not qualify for a concession. Conveyancing is not optional. Building and pest inspections cost money. Insurance often needs to be arranged before settlement. Then there is the glamorous final boss, moving day, where you somehow pay to relocate three mugs and a mattress and still end up ordering takeaway because the kettle vanished.

If you want a quick numbers check, start with the Stamp Duty Calculator, test your likely loan size in the Borrowing Capacity Calculator, and if your deposit is under 20%, run the LMI Calculator too. That trio catches a lot of nasty surprises before a lender or conveyancer does.

The deposit is just the entry ticket

Let us start with the obvious bit. Your deposit is the cash you contribute toward the purchase price. But even if you have the deposit sorted, you still need to budget for the costs around the transaction itself.

That means a buyer with a 10% deposit is not finished just because they reached the deposit target. They may also need cash for:

• stamp duty, unless an exemption or concession applies
• conveyancing or solicitor fees
• building and pest inspections, where relevant
• loan application or settlement-related fees, depending on the lender
• lenders mortgage insurance if borrowing above 80% LVR
• insurance and moving costs
• a small repair or emergency buffer after settlement

That is why buyers who say, “we have the deposit, so we are ready,” are sometimes only emotionally ready. Financially, there may still be a few potholes ahead.

Stamp duty is usually the big one

In many parts of Australia, stamp duty is the biggest non-deposit cost. The catch is that it varies by state or territory, purchase price, property type, and whether you qualify for first home buyer relief.

That last bit matters a lot. Some buyers pay full duty. Others get a discount. Others pay none at all because they fall under a threshold or concession scheme. This is why two buyers purchasing homes at similar prices can end up with very different cash requirements.

The safest move is not to guess. Run the property through the Stamp Duty Calculator and check the state rules before you start making offers. Guessing stamp duty from what your cousin paid in 2023 is how people end up eating dry cereal at settlement.

Conveyancing is boring, important, and very much not optional

Whether you use a conveyancer or solicitor, somebody needs to review the contract, manage searches, handle settlement paperwork, and make sure you are not accidentally buying a headache with walls.

Fees vary, but the bigger point is this: cheap conveyancing is not always cheap if it misses something important. You are not paying for pretty stationery. You are paying for someone to catch issues with the contract, title, easements, special conditions, and settlement process before they become your problem.

That does not mean you need the most expensive operator in town. It does mean the absolute lowest quote should make you curious, not smug.

Inspections are optional right up until they save you

Building and pest inspections are one of those costs buyers love to resent until a report reveals cracked stumps, water damage, termites, or some DIY renovation held together by confidence and silicone.

Not every property needs the same inspection mix. Apartments may lean more heavily on strata records and building condition issues. Houses often make building and pest reports feel like money well spent. The exact risk depends on the property, its age, and the state it is in.

What matters is not pretending the property is fine because the photos were nice and the kitchen had one of those suspiciously flattering pendant lights. A few hundred dollars spent early can save you five figures later, or at least help you negotiate with your eyes open.

LMI can quietly torch your cash plan

If your deposit is below 20% and you are borrowing more than 80% of the property value, there is a decent chance lenders mortgage insurance enters the chat. LMI protects the lender, not you, which is one of those details that never sounds especially romantic.

Depending on the loan size and deposit, LMI can be a noticeable extra cost. Sometimes it is paid upfront. Sometimes it is capitalised into the loan. Either way, it affects the numbers.

This is where buyers often face a real trade-off:

• buy sooner with a smaller deposit and possibly pay LMI
• wait longer, save more, and potentially reduce or avoid it

Neither option is automatically right. If prices are running away from you, paying LMI can still make sense. If stretching leaves you with no buffer at all, it can be a rough way to start home ownership. Use the LMI Calculator and compare both scenarios properly.

Insurance often starts earlier than people think

For houses, buyers are often told to arrange building insurance from exchange because the contract can place risk on the buyer before settlement. The exact legal position depends on the state or territory and the contract, so this is one to confirm with your conveyancer, not your group chat.

For apartments, the building itself may already be insured through the owners corporation or strata, but contents cover can still matter from move-in. Either way, insurance is not a “sort it out later” detail. It belongs on the pre-settlement checklist.

Moving costs are small until they are not

Moving is where lots of buyers tell themselves, “we will just do it cheaply,” and then proceed to discover the price of boxes, cleaners, utility connections, truck hire, furniture assembly, replacement blinds, locksmiths, and emergency Bunnings laps.

Even if you keep it lean, moving has a way of creating a string of medium-sized expenses that appear one after another like badly organised jump scares.

Common examples include:

• removalists or trailer hire
• packing materials and cleaning
• utility connection fees
• new appliances or whitegoods that suddenly become urgent
• locks, smoke alarms, minor repairs, or basic safety fixes

This is why a cash buffer matters. If settlement empties the account completely, even a fairly normal first week in the new place can feel like financial parkour.

A simple way to budget the full cost

Instead of asking, “what deposit do we need?”, ask this instead:

How much cash do we need to buy, settle, move, and still sleep properly after the fact?

A more realistic checklist looks like this:

1. Deposit based on your target price and loan strategy.
2. Stamp duty after any first home buyer concession or exemption.
3. Transaction costs like conveyancing, inspections, and lender fees.
4. LMI if your deposit is below the 20% zone and no waiver or scheme applies.
5. Insurance and moving costs.
6. Buffer money for repairs and early ownership surprises.

When buyers budget this way, they usually make better decisions. They know whether the property is genuinely affordable, not just technically possible.

Why borrowing capacity is only half the story

A lender might say you can borrow a certain amount. That does not automatically mean you should. Banks assess serviceability. You still have to live there, furnish the place, repair the weird tap, and continue eating food that is not just toast and stubbornness.

If you are close to the edge, run your numbers through the Borrowing Capacity Calculator and then be a bit stricter with yourself than the bank is. Future-you will appreciate the restraint, even if present-you really likes that stone benchtop.

The smartest buyers leave room for real life

The goal is not to hit settlement with exactly $14.23 left and a heroic story. The goal is to buy in a way that still lets you breathe once the keys are in your hand.

That usually means:

• not maxing out borrowing capacity just because it exists
• checking stamp duty early, not at the end
• pricing LMI before assuming a smaller deposit is fine
• keeping a buffer for the dull but inevitable post-settlement costs

If you do that, the purchase tends to feel a lot less chaotic. Still expensive, obviously. But at least expensive in a planned, grown-up way.

FAQ

What is the biggest hidden cost when buying a first home?

For many buyers it is stamp duty, because it can add a large upfront cost if no concession applies. After that, LMI and post-settlement cash drain are the usual offenders.

Should I keep cash aside after settlement?

Yes. A buffer helps cover moving costs, urgent repairs, utility setup, and all the fiddly expenses that appear once you get the keys.

Do first home buyers always pay stamp duty?

No. It depends on the state or territory, the property price, and whether you qualify for a concession or exemption.

Is it worth paying LMI to buy sooner?

Sometimes, yes. It depends on the property market, your savings rate, and whether buying sooner improves your position more than waiting does. The numbers matter more than the vibe.