Home Loan Costs and Fees Australia — What You'll Pay
This article provides general information only and does not constitute financial advice. For advice tailored to your situation, consult a licensed financial adviser. Learn more.
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Home Loan Costs and Fees Australia — What You’ll Pay
Getting a home loan in Australia involves more than just the purchase price. Between stamp duty, lenders mortgage insurance, legal fees, conveyancing, building inspections and bank charges, the total cost of buying a $700,000 property can be $30,000–$60,000 above the purchase price. Understanding every cost — before you start searching — is essential for setting a realistic savings target.
This hub links to detailed guides on each cost. Here we give you the full list and approximate amounts.
The Complete List of Home Buying Costs
Upfront Costs at Purchase
| Cost | Typical Amount | Who Pays It |
|---|---|---|
| Stamp duty (transfer duty) | $0–$40,000+ depending on state and FHB status | All buyers (FHBs may be exempt) |
| Lenders mortgage insurance (LMI) | $4,000–$35,000+ | Buyers with <20% deposit |
| Conveyancing / legal fees | $1,000–$3,000 | All buyers |
| Building and pest inspection | $400–$800 | Recommended for all buyers |
| Property valuation fee | $0–$600 (often waived by lender) | Varies |
| Title insurance | $200–$500 | Optional |
| Loan application fee | $0–$800 | Charged by some lenders |
| Settlement fee | $100–$400 | All buyers |
| Registration of mortgage | $100–$300 | All buyers |
| Moving costs | $500–$5,000+ | All buyers |
Ongoing Mortgage Costs
| Cost | Typical Amount |
|---|---|
| Monthly or annual loan fee | $0–$400/year |
| Offset account fee | $0–$10/month |
| Redraw fee | $0–$30 per access (most now free) |
| Fixed rate break cost | Varies — can be significant |
| Discharge fee (at exit) | $150–$500 |
How Much Do These Costs Add Up?
For a typical $700,000 purchase in NSW (not a first home buyer, 15% deposit = LMI applies):
| Cost Item | Amount |
|---|---|
| Stamp duty (standard NSW) | ~$26,990 |
| LMI (~1.5% of loan on 85% LVR) | ~$8,925 |
| Conveyancing | ~$1,500 |
| Building and pest inspection | ~$600 |
| Loan application fee | ~$300 |
| Valuation fee | $0 (waived) |
| Title insurance | ~$350 |
| Settlement fee | ~$200 |
| Mortgage registration | ~$150 |
| Moving costs | ~$1,500 |
| Total buying costs | ~$40,515 |
Minimum savings target: Purchase price + deposit + ~$40,000 in costs.
For a first home buyer exempt from stamp duty, the same purchase has costs of ~$13,525.
Section Guides
Stamp Duty
The largest single upfront cost for most buyers. Ranges from zero (FHBs in NSW ≤$800k) to $40,000+ (standard rate, $1m properties).
→ Stamp Duty Australia — All States → How to Reduce Stamp Duty
Lenders Mortgage Insurance (LMI)
Payable when your deposit is less than 20% of the property value. Protects the lender — not you.
→ LMI Explained → LMI Providers — QBE vs Helia
Conveyancing and Legal
Your solicitor or conveyancer manages the legal transfer of ownership. Expect $1,000–$3,000.
→ Conveyancing Costs Australia
Settlement Fees
Charged at settlement for the final transfer of funds and title. Typically $100–$400.
Application and Ongoing Fees
Some lenders charge upfront application fees ($0–$800) and ongoing annual/monthly fees.
Discharge Fees
When you pay off or refinance your mortgage, your lender charges a discharge fee.
Fixed Rate Break Costs
Breaking a fixed rate loan early can be expensive — sometimes tens of thousands of dollars.
→ Early Repayment Charges on Fixed Rate Loans
Valuation Fees
Banks often require an independent valuation. Sometimes free, sometimes $300–$600.
Title Insurance
One-time premium that protects against title defects. Optional but commonly recommended.
Total Cost of Buying
All costs combined — for a realistic picture of what you need to save.
→ Total Cost of Buying a House in Australia → Hidden Costs of Buying a Home
Mortgage vs Life Insurance
Understanding the difference between lenders mortgage insurance and life insurance.
→ Mortgage Insurance vs Life Insurance
Tips for Managing Home Loan Costs
- Check FHB concessions first — if you’re a first home buyer, stamp duty exemptions can save $15,000–$31,000+
- Save a 20% deposit — avoiding LMI saves thousands upfront and thousands more in interest
- Compare lenders on total cost, not just rate — a slightly higher rate with no fees can be cheaper than a low-rate loan with large ongoing fees
- Use an offset account — reduces effective interest without extra fees in most modern loans
- Get building and pest inspection — $500 now can prevent $20,000+ in surprises after purchase
Related Guides
- Total Cost of Buying a House in Australia
- LMI Explained
- Stamp Duty Australia
- First Home Buyer Guide Australia
- Mortgage Calculator
Stamp Duty — The Biggest Upfront Cost
Stamp duty is typically the largest upfront cost beyond the deposit itself. Rates differ by state and are applied on a sliding scale based on the purchase price:
| Purchase price | Stamp duty — NSW (approx.) | Stamp duty — VIC (approx.) | Stamp duty — QLD (approx.) |
|---|---|---|---|
| $500,000 | ~$17,990 | ~$21,970 | ~$8,750 |
| $700,000 | ~$26,990 | ~$37,070 | ~$15,750 |
| $900,000 | ~$35,990 | ~$49,070 | ~$23,250 |
| $1,200,000 | ~$50,490 | ~$66,570 | ~$38,025 |
Figures are for standard purchases (not first home buyers). FHB exemptions may apply — see Stamp Duty State by State.
Victoria consistently has the highest stamp duty rates in Australia. Queensland tends to be lower. First home buyers may pay zero or significantly reduced duty in most states.
Lenders Mortgage Insurance — A Detailed Look
LMI is charged on a sliding scale based on the loan-to-value ratio (LVR) and loan amount. The higher the LVR (i.e., the smaller the deposit), the higher the LMI premium.
Approximate LMI cost at different LVRs on a $700,000 property:
| Deposit | LVR | Approx. LMI premium |
|---|---|---|
| 20% ($140k) | 80% | Nil |
| 15% ($105k) | 85% | ~$9,000–$11,000 |
| 10% ($70k) | 90% | ~$19,000–$23,000 |
| 5% ($35k) | 95% | ~$28,000–$35,000 |
LMI is calculated by the lender’s preferred LMI insurer (Helia or QBE in Australia). Exact premiums vary by insurer and state.
LMI can be capitalised (added to the loan balance) — meaning you borrow more and pay interest on the LMI over the loan term. This increases the total cost further.
Ways to Reduce the Total Cost
Save a 20% deposit: The single most effective way to eliminate LMI (typically $9,000–$35,000) and reduce your ongoing repayments. Takes longer, but significantly reduces the total cost of home ownership.
First Home Guarantee: First home buyers eligible for the government’s First Home Guarantee can purchase with a 5% deposit and no LMI — the government guarantees the remaining 15% to the lender. Income and property price caps apply.
Explore FHB stamp duty concessions: In NSW, eligible first home buyers pay no stamp duty on purchases up to $800,000 and a reduced rate to $1,000,000. In VIC, the FHB concession applies to new homes up to $600,000. This can save $20,000–$30,000.
Compare lenders on total cost: A loan with a 0.20% higher rate but no establishment fee, no annual fee, and a free offset account may cost less over 5 years than a low-rate loan with multiple fees.
Frequently Asked Questions
How much money do I need to buy a $700,000 house in Australia?
For a $700,000 purchase in NSW (not a first home buyer, 15% deposit to minimise LMI):
- Deposit: $105,000 (15%)
- Stamp duty: ~$27,000
- LMI (~1.5% of loan): ~$8,925
- Conveyancing + inspections + other: ~$4,000
- Total savings required: ~$145,000
With a 20% deposit ($140,000), LMI disappears but total savings required are similar (~$145,000 with stamp duty and costs). The benefit of 20% is the elimination of LMI and lower ongoing interest charges.
Can I negotiate lender fees?
Yes — particularly for well-qualified borrowers or large loans. Application fees, annual fees, and rate discounts are all negotiable. A mortgage broker can negotiate on your behalf across multiple lenders simultaneously. Online lenders and smaller banks often waive fees entirely to attract business.
Conveyancing — What You’re Paying For
Conveyancing fees ($1,500–$3,500) cover the legal transfer of title from seller to buyer. Your conveyancer or solicitor:
- Reviews the contract of sale and Section 32 statement (VIC) or equivalent
- Checks the title for encumbrances, easements, or covenants that could restrict use
- Manages settlement with the seller’s conveyancer and your lender
- Ensures all adjustments (rates, strata fees, land tax) are calculated correctly
- Transfers title in the state land registry (now electronic via PEXA in all states)
Online conveyancing services cost $700–$1,500 and handle straightforward purchases. Complex transactions (off-the-plan, foreign investment approval, FIRB applications) benefit from an experienced solicitor even at higher cost.
This article provides general information only. Costs vary by lender, state and individual circumstances. For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. Find one through MoneySmart.