The Young Australian's Guide to Buying Your First Home

Most first home buyers focus on the deposit and underestimate everything else. On a $650,000 property, the upfront costs beyond the deposit can easily add $25,000–$50,000 — and not knowing this has derailed plenty of purchases that were otherwise ready to proceed.

The costs to plan for:

• Stamp duty (transfer duty) — the biggest additional cost. Calculated as a percentage of the purchase price and varies by state. On a $650,000 property: approximately $24,800 in VIC, $24,457 in NSW, $12,425 in QLD (for owner-occupiers), $26,730 in WA. First home buyers often receive concessions — see Part 3.
• Lenders Mortgage Insurance (LMI) — if your deposit is under 20%, your lender will charge LMI to protect themselves. On a $650,000 property with a 10% deposit, LMI can add $10,000–$15,000 to your loan. It's not optional — but it can be capitalised into the loan.
• Conveyancing — the legal process of transferring ownership. A solicitor or licensed conveyancer handles this. Cost: typically $1,200–$2,500.
• Building and pest inspection — essential for any established property. Identifies structural issues, termites, water damage. Cost: $400–$700. Never skip this.
• Mortgage registration and transfer fees — government fees for registering the mortgage and transferring the title, typically $500–$1,500 depending on state.

The standard deposit for a home loan in Australia is 20% of the purchase price. On a $650,000 home, that's $130,000. For most people in their 20s, that's a substantial savings goal — but it's achievable with the right structure and timeline.

The 20% figure isn't arbitrary. With a 20% deposit, you avoid Lenders Mortgage Insurance (LMI) — a premium that can add $10,000–$20,000 to your purchase cost. You also start with more equity, have lower repayments, and demonstrate to lenders that you're a lower-risk borrower.

That said, many first home buyers buy with a smaller deposit — 5% or 10% — using government schemes that waive LMI (see Part 3). Whether to wait and save more or buy sooner with a smaller deposit depends on your local market, your timeline, and your financial situation.

• Genuine savings: Most lenders require evidence that your deposit was genuinely saved over at least three months — not a gift, not a personal loan, not a lump sum inheritance. Some lenders are more flexible on this than others. Your broker can advise.
• Where to keep your deposit: In a high-interest savings account earning the best available rate. At current rates, a $100,000 deposit can earn $5,000+ per year in interest. Look at ING, Ubank, Macquarie — compare rates quarterly.
• The First Home Super Saver Scheme (FHSS) lets you make voluntary contributions to super and later withdraw up to $50,000 for a first home deposit. The advantage is that savings inside super are taxed at 15% rather than your marginal rate. See Part 3 for more detail.