When taking out a home loan, a borrower typically cannot borrow the full purchase price of the home and needs to make a down payment for the purchase price from the home and need to make a down payment on the purchase price from their own funds, called a deposit.

Your deposit is your initial contribution to the purchase price of your property. It is calculated as a percentage of the property’s value. Your deposit is paid to the seller of the property and is deducted from the total purchase price. The lender issues a loan for the balance (the rest) of the purchase price.

The deposit is your initial contribution to the purchase of your property. The size of the deposit required by the bank is calculated as a percentage of your property’s value (I.e. 5%, 10% or 20%).

In Victoria, a 20% deposit on the purchase price for buying an established home is typically the minimum you need to avoid your lender requiring you to pay Lenders Mortgage Insurance. For example, for a $600,000 property, a 20% deposit would be equal to $120,000.

For building a home, a minimum 5% deposit is sometimes accepted; however, typically 10-20% deposit is required.

Typically, lenders require proof that you have saved your deposit over a period of time. This is called Proof of Genuine Savings. Proof of genuine savings is required by the Lender because it shows your ability to responsibly manage money. It is not a legal requirement of obtaining a loan and different Lenders have different to criteria. Typically, you may be asked to show that you have consistently added to your savings for a minimum of three months. If you receive one-off payments, like a grant or inheritance, often these payments will not be considered as proof of genuine savings.

It is critical that once you have saved a deposit and find a property you want to purchase, you seek home loan pre-approval from a lender before signing a contract of sale with the seller of the property you wish to purchase.

In the Home Ownership Schemes Available section there is a list of programs which provide the opportunity to save a smaller deposit amount when applying for a home loan, under certain eligibility criteria.

If you are financing your home purchase with a home loan, the lender may charge associated fees with the loan.

They are dependent on your chosen lender, and some lenders choose to waive these fees to attract customers.

These fees may include:

• Loan application/establishment fees
• Property valuation fees

Lenders Mortgage Insurance (LMI) is a form of insurance that protects the lender in the event of the borrower failing to repay their home loan. 

This is called 'defaulting' on your loan and in this situation, the lender will be paid what is still owed under the LMI policy. In this situation, the insurer may take legal action to recover the money they paid the lender.

If you are required to pay LMI, the bank will tell you the cost when completing your loan application process.

In our Home Ownership Schemes Available section there is a list of programs which provide the opportunity to not pay LMI.

Once you have been pre-approved for a loan and you want to buy a new or existing property, it is recommended to pay a professional to conduct a building and pest inspection before entering into a contract of sale or bidding at auction.

Building and pest inspections help identify any structural or pest-related issues that may exist. The cost of these inspections varies based on the size, complexity and location of the property.

To find a registered building practitioner who will conduct an inspection, visit the Victorian Building Authority (VBA) website.

It also recommended to conduct an asbestos inspection is if the property was built before 1990. 

Engaging a solicitor or conveyancer can be a key step in handling the legal aspects of the property purchase. The fees charged by solicitors or conveyancers can vary, so it's advisable to obtain quotes and compare their services. Legal services include;

• Property title searches
• Contract reviews
• Settlement coordination

There are many free legal service providers. Visit our Connect section to find out more about solicitor or conveyancers' services and the free providers available.

Land Transfer Duty, or 'Stamp Duty', is a State Government tax imposed on property transactions. If, and how much, you pay in stamp duty depends on the sale price of your property and varies from state to state.

In Victoria, stamp duty rates are progressive, meaning you pay more stamp duty as the value of your property goes up. There are many stamp duty exemptions or concessions, including if you are a first homebuyer, a pensioner, buying somewhere as your principal place of residence (PPR), buying off-the-plan or buying a new property. You can find out more on concessions and exemptions via the State Revenue Website.

Calculate your potential stamp duty costs via the Land Transfer (Stamp) Duty Calculator on the SRO website.

There are many state/territory government charges and fees that you may be required to pay, depending on your property transaction and value.

The two most common fees include, Title Transfer Fee (a fee for transferring the property title from the seller to the buyer) and Mortgage Registration Fee (a fee for ensuring your mortgage can be viewed with a title search). 

As of May 2024, these two fees are approximately:

• Title transfer = up to $3,607, depending on value of property
• Online mortgage registration = $119 for all properties.

Moving expenses include hiring professional movers, renting a moving truck, purchasing packing supplies, and transferring utilities. These costs can vary depending on the distance of the move, the volume of belongings, weekend versus weekday prices and the type of property you are moving into.

When establishing your budget for moving house it is important to research what costs may apply to your situation and forecast accordingly for them.

Utility services refer to services that your house uses which are connected to public utility infrastructure. For example, the major utilities are electricity, gas, water, sewerage and internet. 

Utilities will often charge a connecting fee, which is a one-off start cost, and then afterward charge a regular operating cost which must be paid ongoing.

Whilst insurance is not mandatory, it is important carefully consider how to best protect your home against potential risks and damage.

Common insurance includes home and contents, damage, theft, fire and flood insurance.

Costs depend on your chosen insurance provider, the location of your property, and the value of your property.

See our Insurance section for more detailed information.

Council rates are local government taxes charged to homeowners in that council area. Council rates vary based on the location and value of the property that you wish to purchase.

It is recommended that you contact your local council to find out how much their rates would be. This information is also disclosed by the seller when advertising a property for sale.