Most first‑home buyers focus on the deposit – and rightly so. But there’s a stack of extra costs that can catch you off guard if you haven’t planned for them. In 2026, those hidden extras typically run between $8,000 and $15,000 on a median‑priced home. That’s on top of your deposit and stamp duty.
This article walks you through each cost – conveyancing, building and pest inspections, mortgage registration, lenders mortgage insurance, and more – with current 2026 figures so you can budget with confidence.
Understanding the upfront expenses beyond the deposit
When you save for a home, you might set aside a 5% or 10% deposit. But before you hand over the keys, you’ll need to pay:
· Conveyancing / legal fees
· Building inspection
· Pest inspection
· Mortgage registration and transfer fees
· Lenders Mortgage Insurance (LMI) if your deposit is under 20%
· Valuation fee (sometimes waived)
· Moving costs and initial utilities connection
· Adjustments for council rates and strata levies
These costs are all payable at or before settlement. If you don’t have them ready, your finance approval could fall through. The good news is you can estimate them in advance.
Conveyancing and legal fees: $1,500 – $3,000
A conveyancer or solicitor handles the legal transfer of property. They check the contract, conduct title searches, liaise with your lender, and ensure settlement runs smoothly. Typical fees in 2026 are:
· Conveyancer: $1,500 to $2,500
· Solicitor: $2,500 to $4,000
Some firms offer fixed‑price packages that include disbursements (search fees, title office charges). Always ask for an itemised quote. If you’re buying in a state with complex requirements (e.g. New South Wales), expect higher costs.
Building and pest inspections: $500 – $1,200
A building inspection covers structural integrity – foundations, roof, walls, wiring, plumbing. A pest inspection (often combined) looks for termites, borers, and fungal decay. In 2026, a combined inspection costs:
· $500 – $800 for a standard 3‑bedroom home
· $800 – $1,200 for larger or older homes
Skipping these can cost you later. If the inspection reveals major defects, you can renegotiate the price or walk away.
Mortgage registration and transfer fees: $200 – $500
State governments charge fees to register the mortgage on title and to transfer the property into your name. These are separate from stamp duty and are paid at settlement. Typical 2026 figures:
· NSW: $150 – $350 (depending on property price)
· VIC: $120 – $300
· QLD: $180 – $400
Check your state’s Land Registry for exact amounts.
Lenders Mortgage Insurance (LMI): potentially $10,000+
If your deposit is less than 20% of the purchase price, your lender will require LMI. This insurance protects the lender, not you. In 2026, LMI premiums vary by loan size and deposit percentage. For example:
· On a $600,000 loan with 5% deposit: $18,000 – $22,000
· On a $600,000 loan with 10% deposit: $9,000 – $12,000
The Federal Housing Guarantee (FHBG) allows first‑home buyers to purchase with a 5% deposit without paying LMI, provided the property price is under the cap: Sydney $1.5M, Melbourne $950k, Brisbane $1M, Perth $850k (from July 2026). No income cap applies. If you qualify, you can avoid LMI entirely.
Stamp duty: the largest hidden cost
Stamp duty is not exactly hidden, but many buyers underestimate it. In 2026, rates vary by state and property value. For a $700,000 home in Brisbane, stamp duty is roughly $18,000. In Sydney, it’s around $27,000. First‑home buyers in most states can access concessions or full exemptions on properties under certain thresholds (e.g. NSW: stamp duty free up to $800,000). Check your state’s rules.
Because stamp duty is due at settlement, you need that cash saved separately from your deposit.
Other miscellaneous costs
· Moving costs: $400 – $2,000 depending on distance and volume
· Home insurance: usually required before settlement – about $800 – $1,500 a year
· Council rate and strata adjustments: you’ll reimburse the vendor for rates they’ve prepaid – typically $200 – $800
· Valuation fee: some lenders charge $200 – $400 for a property valuation (others absorb it)
· Loan application fee: may be zero if you use a competitive lender, but can be $0 – $600
All up, these extras add $1,500 – $4,000 to your cash needed at settlement.
Budgeting for the hidden extras: a realistic scenario
Let’s take a first‑home buyer in Melbourne buying a $650,000 unit with a 5% deposit ($32,500). They qualify for the FHBG so no LMI. Their extra costs:
· Conveyancing: $2,000
· Building & pest: $700
· Mortgage registration: $250
· Stamp duty (first‑home concession may reduce this – assume $0 if eligible)
· Moving & insurance: $1,200
· Adjustments: $300
· Total extras: $4,450
That’s within the lower band. But if they don’t get the FHBG and need LMI on a 5% deposit, the extras shoot past $20,000. Always budget the worst case.
How to minimise these costs
· Use the FHBG: if you’re a first home buyer and the property is under the cap, you save LMI and can buy with 5% deposit.
· Ask the vendor to pay for pre‑inspection reports: some sellers provide recent building and pest reports – but always get your own.
· Compare conveyancing quotes: online conveyancers often charge less.
· Negotiate the purchase price: a lower price reduces stamp duty and LMI (if applicable).
· Look for no‑LMI lender deals: a few lenders offer policies that waive LMI for certain professionals or high‑income buyers, but check eligibility.
The role of current interest rates in overall affordability
The RBA cash rate remains at 4.35% in 2026. Lowest variable mortgage rates sit around 5.69%. With APRA’s mandatory 3% interest rate buffer, your lender will assess your ability to repay at 8.69%. That means you may qualify for less than you expect, even if the advertised rate is lower.
Additionally, from February 2026, APRA’s 6x DTI cap limits lending to six times your gross income. If you earn $100,000, the maximum loan size is $600,000 regardless of deposit.
These factors affect how much you can borrow – and therefore which properties you can afford after accounting for hidden costs.
Frequently Asked Questions
Q: How much cash do I really need beyond the deposit for a $700,000 home in 2026?
A: If you have a 20% deposit ($140,000), you’ll still need roughly $8,000 – $12,000 for conveyancing, inspections, registration, and adjustments. If your deposit is only 5% ($35,000) and you don’t qualify for the FHBG, LMI could add another $20,000, pushing extras close to $30,000.
Q: Does the Federal Housing Guarantee cover stamp duty?
A: No. The FHBG only replaces the need for LMI and allows a 5% deposit. You still need to pay stamp duty unless your state offers a separate first‑home buyer concession. For example, in NSW, first‑home buyers pay no stamp duty on purchases up to $800,000 and a reduced amount up to $1,000,000.
Q: Can I include these hidden costs in my home loan?
A: Some lenders allow you to capitalise certain costs like LMI into the loan, but that increases your borrowing and monthly repayments. Conveyancing, inspections, and registration must be paid out of pocket – they can’t be loan‑financed.
Q: How do I avoid the $20,000 LMI bill?
A: Save a 20% deposit, or use the Federal Housing Guarantee if you’re a first‑home buyer buying under the price caps. Also, a few lenders offer LMI‑waiver products for doctors, lawyers, or accountants – ask your broker.
Q: Are building and pest inspections mandatory?
A: No, but strongly recommended. A $700 inspection could save you $30,000 if it uncovers major structural issues like termite damage or a leaking roof.
Sources
· Reserve Bank of Australia – cash rate target (June 2026)
· Australian Prudential Regulation Authority – macroprudential measures (February 2026)
· Housing Australia – First Home Guarantee thresholds (July 2026)
· State Revenue Office NSW, VIC, QLD – stamp duty rates and concessions
· Department of Lands NSW – mortgage registration fees
Use our stamp duty calculator to estimate your exact costs:
Launch stamp duty calculator →
Need a complete cost breakdown for your purchase?
Open interactive budget widget → (data‑open‑widget: budget)
Cross‑links for further reading:
· Stamp duty 2026: state‑by‑state guide
· Stamp duty concessions for first‑home buyers NSW, VIC, QLD
· Conveyancing, inspections, and settlement: a complete 2026 guide
Not sure what rate you'd get?
Ask the AI — free, unbiased, and no sign-up required. It knows current Australian lending rules and can run the numbers for you.