What it really costs to buy a home in Australia

Buying a home in Australia is usually the single biggest financial commitment many people will make.

While most buyers understand the major costs — the deposit, the purchase price and mortgage repayments — it’s the lesser-known or hidden expenses that can catch people off guard and make the difference between a smooth and profitable purchase and a financial headache.

Bridget Bowman, Senior Mortgage Specialist at Specialist Mortgage, and API Magazine have unpacked both the obvious and the hidden costs, highlighting what buyers across different states should budget for when planning a purchase (based on a price of $750,000).

The obvious costs you’ll expect:

1. Deposit – most lenders expect at least 10 to 20 per cent of the purchase price. For a $750,000 property, that’s $75,000 to $150,000. Some schemes allow lower deposits, for example first home buyer programs, however, these often come with extra costs such as higher interest rates, or conditions.
2. Stamp duty and transfer costs – this is one of the biggest extra costs and varies widely by state, value and buyer type. Even after concessions, stamp duty can range from around $20,000 to $40,000 on a $750,000 home, depending on location and buyer type.
3. Lenders’ Mortgage Insurance (LMI) – if your deposit is less than 20 per cent, most lenders will require LMI, which protects the lender but it payable by the buyer. On a $750,000 property, LMI could cost anywhere from $1,000 to $25,000, depending on the lender and loan size.
4. Legal, conveyancing and registration fees – a solicitor or conveyancer will handle contracts and the legalities. Government registration and mortgage documentation fees also apply. Together, these can total around $2,000 to $3,000.

For a $750,000 property, a realistic buffer for major upfront costs might sit between $30,000 and $70,000, depending on the size of your deposit and whether you qualify as a first home buyer.

The hidden costs that deserve attention

The costs outlined above might dominate early conversations, but a handful of smaller, regular or one-off expenses can shape your property purchase budget just as much. Here are the key ones highlighted by Ms Bowman:

Building and pest inspections – a must-have for houses, these usually cost $400 to $800, but can save thousands in future repairs. For apartments, buyers should budget for a strata report or building condition assessment.

Moving and establishment costs – from removalists and truck hire to utility connections and short-term accommodation between settlements, this can add another $2,000 to $5,000 depending on distance and timing.

Insurance premiums – building insurance is mandatory for financed properties, but costs are rising sharply, especially in flood- or bushfire-prone areas. Annual premiums can easily top $2,000 to $3,000 in higher-risk zones.

Council and water rates – local rates vary by region but generally range between $2,000 and $3,500 per year. Buyers can check local council sites to confirm annual levies and fees.

Strata or body corporate fees – apartment or townhouse buyers will face regular strata fees that cover shared maintenance, insurance and sinking funds for the whole building. Depending on facilities, these vary greatly starting from $3,000 to $10,000 annually. The more facilities the property has, the higher your strata fees will be.

Maintenance and repairs – even newer properties require upkeep. Industry guides suggest setting aside at least 1 per cent of property value annually, or around $7,500 per year for a $750,000 home, to cover property maintenance costs.

Loan and bank fees – beyond interest, some lenders may charge application, settlement, annual or redraw fees. These vary greatly from lender to lender, and it is always a good idea to review your loan regularly to ensure it is still a competitive option for you.

Utilities and connection costs – electricity, water, gas and internet setup fees can add $300 to $700 initially, especially for new builds.

Opportunity and servicing costs – higher repayments or rate increases can strain cash flow. Budgeting an additional 1 to 2 per cent buffer on interest rates helps protect affordability if market conditions shift.

State-by-state stamp duty differences

Stamp duty varies significantly around Australia. On a $750,000 dwelling:

• New South Wales: typically $28,000 to $30,000 (with concessions for eligible first home buyers)
• Victoria: around $40,000 to $42,000
• Queensland: generally $18,000 to $22,000
• South Australia: approximately $35,000 to $38,000
• Western Australia: roughly $28,000 to $30,000, with some first-home rebates available

These differences mean your total entry cost can vary by tens of thousands depending on where you buy, a key factor when comparing states or looking to relocate.

Why hidden costs matter

Understanding the full cost picture helps avoid being overextended at settlement and beyond.

A buyer who only budgets for the deposit and loan repayments may find themselves short when faced with inspections, legal fees or insurance, or down the track if interest rates rise.

Investors risk eroding rental yields if they underestimate holding and maintenance costs. For owner-occupiers, hidden costs can strain monthly budgets and delay long-term goals like renovations or upgrades.

Tips to manage the full cost

• Budget beyond the deposit: build a cost breakdown, including stamp duty, legal fees, inspections, insurance and moving costs.
• Shop around: lenders, insurers and conveyancers all vary in fees and charges, as a few quotes could save you thousands.
• Check state rules early: stamp duty concessions and first-home grants vary from state to state and often change, so its always best to check with the State Revenue office or a conveyancer on expected government purchase costs and eligibility for concession/rebate schemes.
• Build a safety buffer: allow an extra 10 to 15 per cent above your expected purchase cost for unexpected fees or repairs.
• Inspect thoroughly: always conduct a building and pest inspection to avoid unforeseen expenses post-purchase.
• Plan for ongoing costs: add council rates, insurance, strata fees and maintenance into your affordability calculations.
• Seek professional advice: mortgage brokers, financial advisers and conveyancers can help.

The true price of that dream home

The true cost of buying a home in Australia can stretch beyond the headline price tag.

“While stamp duty and deposits dominate most discussions, it’s the smaller, cumulative expenses — inspections, insurance, strata fees, and maintenance — that often catch buyers off guard,” Ms Bowman said.

“By preparing for both the visible and hidden costs, and allowing room in your budget for unexpected costs, you’ll not only protect your finances but also enjoy your new home with fewer surprises.”