Property

First Home Buyer Costs: What to Budget For

The deposit is only the beginning. A first home comes with a cluster of other upfront costs — and missing them is a classic first-buyer mistake.

Plantrino Guides · Updated 2026 · About a 7-minute read

Saving a deposit feels like the finish line for a first home buyer. In reality it is closer to the halfway point. Around the deposit sits a ring of other costs that must be paid in cash, and buyers who plan only for the deposit can find themselves short at the worst possible moment. This guide lays out what to budget for.

The Deposit

The deposit is the portion of the price you pay yourself, with the mortgage covering the rest. A larger deposit has real advantages: it shrinks the loan, reduces the interest you pay over time, and — importantly — can help you avoid the insurance cost described below. Many buyers aim for a deposit of around 20% of the price for this reason, though smaller deposits are common.

Stamp Duty

Stamp duty is a state-based tax on the property purchase, and for many buyers it is the largest cost after the deposit. It can run into the tens of thousands. The encouraging news for first home buyers is that most states offer concessions or exemptions — sometimes substantial — up to certain price thresholds. The rules vary by state, so this is essential to check early, because it can change your whole budget.

Lenders Mortgage Insurance

If your deposit is below a certain share of the property value — often around 20% — the lender may require Lenders Mortgage Insurance (LMI). This is a one-off cost that protects the lender, not you, if the loan cannot be repaid. It can add a meaningful sum, and it is one of the strongest reasons to build a larger deposit if you can. Some first home buyer schemes are designed to help buyers avoid LMI.

Add up the full cost of buying your first home.

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Legal and Conveyancing Fees

Transferring property ownership involves legal work — reviewing contracts, conducting searches, and handling settlement. Whether you use a solicitor or a conveyancer, this is a necessary cost. It is far smaller than stamp duty, but it is not optional.

Building and Pest Inspections

Before committing, it is strongly advisable to have the property professionally inspected for structural issues and pests. This is a modest cost that can save an enormous one — discovering a serious problem before you buy is vastly better than after. Treat it as cheap insurance, not an expense to skip.

Other Costs to Remember

Loan application or establishment fees charged by the lender.
Mortgage registration and transfer fees charged by government.
Moving costs — removalists, connections, and the small expenses of settling in.
Council and utility adjustments at settlement.
Insurance — building insurance is typically needed from settlement.

Always keep a buffer Beyond every cost listed here, leave a cash buffer after settlement. A new home brings immediate expenses — repairs, furniture, unexpected bills — and moving in with nothing in reserve is stressful and risky. A sensible emergency fund should survive the purchase, not be consumed by it.

First Home Buyer Schemes

Governments often run schemes specifically to help first buyers — these can include grants, stamp duty concessions, and arrangements that reduce the deposit needed or help avoid LMI. Eligibility, value, and availability change over time and differ by state. They can make a genuine difference, so it is well worth researching what is currently available where you plan to buy.

Frequently Asked Questions

How much should I budget beyond the deposit?

It varies, but stamp duty, legal fees, inspections, loan fees, and moving costs together can add a significant amount. Estimating each early gives you a realistic total.

Can I avoid Lenders Mortgage Insurance?

Often yes — typically by having a large enough deposit, or through certain first home buyer schemes designed to help with this.

Are building inspections really necessary?

They are strongly advisable. The cost is small compared with the price of discovering a major structural or pest problem after you have bought.

Buying a first home is not just about the deposit — it is the deposit plus stamp duty, possible LMI, legal fees, inspections, and a handful of smaller costs, with a buffer left over. Map every one of them early. The buyers who plan for the full picture move in with confidence rather than a nasty surprise.