When you want to buy a property, you have two approaches to choose from: (1) You can set a budget for the initial deposit and start saving up towards that, or (2) you can find out how much you’ll need to buy the property, and get your relatives to help you out as guarantors. Ideally, shoot to cover a 20% deposit… plus the following extras.

Stamp duty refers to the tax levied on the paperwork involved in the purchase, such as cheques, receipts, and land transactions. The stamp duty amount varies from one location to another, but we recommend you estimate it to be between 3% and 5.5% of the purchase price.

Also, if you’re buying your first home, check if you’re entitled to those special one-time state discounts.

For most property purchases, these extra costs are unavoidable. To be safe, add $2,000 to $3,000 to cover everything.

If you let Freedom Lend help you out, that means a few more additional charges. Check out how much their valuation fees, document fees, and loan application fees are and add them to the subtotal.

If your initial deposit will be more than 20% of the property’s purchase price, then you can disregard this extra cost. Otherwise, you’ll be subject to Lenders’ Mortgage Insurance, or LMI. The LMI cost will depend on your lend-to-value ratio (LVR), but it’s best to budget an extra 2% to 3.5% of the loan amount.