Buying a home is exciting, but the upfront costs can catch you by surprise.
From your deposit to stamp duty, plus those little extras like inspections and conveyancing, here’s a simplified run down of what to expect from a typical $1.3M property purchase in NSW.
1. Deposit
Most lenders require a deposit of at least 20% for an investment property (and sometimes less for an owner occupier, depending on the lender) to avoid Lenders Mortgage Insurance (LMI). For a $1.3M property:
- 20% deposit: $260,000
2. Stamp Duty
Stamp duty is a state government tax on property purchases. For a $1.3M home in NSW, the cost is roughly $51,490.
Note that stamp duty does vary from state to state.
3. Other Costs to Budget For
- Conveyancer/solicitor fees: $1,500 to $3,000
- Building and pest inspection: $500 to $1,000
- Loan application or establishment fees: $100 to $1,000 (varies from lender to lender)
- Lenders Mortgage Insurance (LMI): Only applies if your deposit is less than 20%
Sundries
Other smaller costs can include moving expenses, utility connections, and insurance, but these are generally minor compared to the big three above.
Total Upfront Costs (Estimated)
- Deposit: $260,000
- Stamp Duty: $51,490
- Conveyancing & inspections: ~$3,000
- Total: ~$314,490
Buying a home is a big step, and being prepared for these costs upfront can make the process a lot smoother not to mention being mentally prepared can help with managing expectations.
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