Saving a 20 per cent deposit feels like crossing the finish line. But when buying a home in Australia, the deposit is only one part of the cash you may need before settlement.

For many buyers using a mortgage broker Australia service, the first focus is usually borrowing power. But the bigger surprise often comes from the costs sitting outside the deposit.

On an $800,000 property, upfront costs can still reach tens of thousands of dollars when stamp duty, Lenders Mortgage Insurance (LMI), conveyancing, inspections and settlement costs are included. For many first home buyers, these are the costs that catch them off guard.

These costs are not always optional. Some are due before settlement, some are paid at settlement, and some may be added to the loan only if the lender allows it. Moneysmart also explains that buyers need to cover other costs of buying a house, such as stamp duty and legal fees, beyond the deposit.

Here is what usually makes up the upfront costs of buying a house in Australia in 2026.

Stamp Duty Is Usually the Biggest Single Cost

Outside the deposit itself, stamp duty can be the highest upfront cost in a property purchase. The exact amount depends on the state or territory, the purchase price, whether the property is new or established, and whether you qualify for a first home buyer concession.

For eligible first home buyers, stamp duty can sometimes be reduced or removed completely. Victoria currently offers a Victoria first home buyer stamp duty exemption on homes up to $600,000, with a partial concession up to $750,000.

The ACT offers $0 conveyance duty for eligible purchases up to $1,020,000 under its 2025–26 ACT Home Buyer Concession Scheme. Queensland also offers a Queensland first home concession, with no duty payable for eligible first home buyers on homes valued up to $700,000 and concessions phasing out below $800,000.

Because stamp duty rules change by state and can shift over time, buyers should always check the current stamp duty calculator for their state before setting a budget.

The Full Breakdown

Beyond stamp duty, several smaller but unavoidable settlement costs can add up quickly. Here is what to budget for on a typical purchase:

Cost Item	Typical Range
Stamp duty/transfer duty	$0 to $40,000+ depending on state, price and concessions
Conveyancing / legal fees	$700 – $2,500
Building and pest inspection	$400 – $1,000
Lender’s mortgage insurance, if deposit is under 20%	Can run into thousands or five figures
Loan application/property valuation fees	$200 – $600
Title transfer and mortgage registration	Varies by state
Building/home insurance	Varies by property and insurer
Council, water and settlement adjustments	Varies by settlement timing
Typical total on top of deposit	Costs vary depending on stamp duty, LMI and first-home buyer concessions.

For eligible first home buyers using concessions or the Australian Government 5% Deposit Scheme, the total cash needed beyond the deposit may be lower. But it still needs to be checked before making an offer.

This is where a home loan broker australia service can help you understand your real cash-to-settlement position before you commit.

Also Read: Buying Your First Home in NSW 2026: Government Schemes Still Available

Lenders Mortgage Insurance: The One That Surprises People Most

Lender’s mortgage insurance applies when your loan is above 80 per cent of the property value, unless you qualify for an exemption or scheme. It protects the lender, not the borrower, even though the borrower usually pays for it.

On a property purchase with a smaller deposit, LMI can easily become one of the biggest upfront costs after stamp duty. The exact amount depends on the lender, insurer, loan size, deposit amount and loan-to-value ratio.

Many lenders may allow LMI to be added to the loan rather than paid upfront. That can reduce the cash needed at settlement, but it also increases the loan amount and the interest paid over time.

This is why choosing between Home Loans Australia options should not be based only on the advertised rate. A home loan mortgage broker can help compare the full cost picture, including deposit size, lender fees, LMI impact, loan structure and repayment comfort.

The Australian Government 5% Deposit Scheme Can Help Eligible Buyers

The Australian Government 5% Deposit Scheme can help eligible first home buyers purchase with a minimum 5 per cent deposit and no lender’s mortgage insurance.

This can make a major difference to the upfront costs of buying a home in Australia. But buyers still need to meet participating lender approval, scheme rules and property price caps. It is worth checking eligibility before assuming LMI is unavoidable.

The 2026 Rule: Do Not Budget for the Deposit Alone

The general rule for 2026 is simple: do not calculate your buying budget using the deposit alone.

For an established home where stamp duty and LMI apply, buyers may need to allow around 4 to 7 per cent of the purchase price on top of the deposit. For first home buyers who qualify for stamp duty concessions, the figure may be lower, but there will still be legal fees, inspections, registration costs, insurance and settlement adjustments to consider.

A buyer who looks affordable on paper can still run into problems if the cash-to-settlement figure has not been calculated properly.

Where OM Financials Fits In

Getting the total cash-to-settlement figure wrong is one of the most common reasons a purchase becomes stressful at the final stage.

Shyam Maggo and the OM Financials team work through the complete upfront cost picture before you make an offer, not after. This includes your deposit, stamp duty position, LMI estimate, lender fees, settlement costs and any government schemes or concessions you may potentially be eligible for.

As a Finance Broker Australia service, OM Financials helps buyers understand the real numbers before they commit to a property.

Whether you are buying in NSW or Queensland, OM Financials can help you review your deposit, upfront costs and home loan options with more clarity. 

Book a free consultation at omfinancials.com.au to get a clear picture of your total upfront costs before you start looking. Follow OM Financials on Instagram, Facebook, YouTube and LinkedIn for ongoing home loan guidance through 2026.

Frequently Asked Questions

Q: How much should I budget on top of my deposit when buying a home?

Answer: Generally, buyers should allow 4 to 7 per cent of the purchase price when stamp duty and/or LMI applies. The actual amount depends on your state, purchase price, deposit size, property type and whether you qualify for first home buyer concessions.

Q: Can Lenders Mortgage Insurance be avoided?

Answer: Yes. LMI can usually be avoided with a 20 percent deposit, or through options such as the Australian Government 5% Deposit Scheme, where eligible first home buyers may purchase with a 5 percent deposit and no LMI.

Q: Can stamp duty be added to my home loan instead of paid upfront?

Answer: Not automatically. Stamp duty is usually treated as a separate buying cost. Some buyers may be able to borrow extra if the lender approves and borrowing capacity allows, but it should not be assumed.