The median house price in Aussie capital cities is about $860,000. In Sydney, it’s $1,031,138 for a dwelling, and over $1.2 million for a house. A 20% deposit allows you to forego Lenders Mortgage Insurance (LMI) – that puts the median deposit at $172,000. Recent research from Finder has shown that the average first home buyer needs at least 12 years to save for a deposit for the average unit and 16 years for the average house in Australia.

This timeline to purchase a home is overwhelming for most, especially those that are earning below the average weekly income. The research is also assuming that individuals are saving 25% of their post-tax income, an endeavour that is becoming increasingly difficult as cost of living pressures persist.

Home Buyer Helper

The Shared Equity Home Buyer Helper is a NSW Government initiative that aims to ‘make it easier and much more affordable for eligible people to buy a home’.

How does it work?

The NSW Government will contribute up to 40% of the purchase price of a new home, and up to 30% towards an existing home.

This will mean that the Government will have an equity share in the property that you live in. Due to the large deposit amount, the buyer will also avoid Lender’s Mortgage Insurance.
First home buyers will be eligible to pay a deposit of 2%, and they won’t have to pay interest on the Government’s equity share of the home. This means that the mortgage repayments will be more affordable for investors.

Home buyer help table

*This scenario assumes that the first home buyer is eligible for a stamp duty exemption, and the variable interest rate is 6.09% on a 30-year loan term.

It is easy to see from the above scenario that the mortgage repayments are much more manageable with the government’s contribution to the deposit. The average weekly earnings for an Australian adult is $1,276 (after tax). Those in single income households would be under severe mortgage stress in all three circumstances (if they were lent the funds).

It is conventional wisdom that mortgage debt is ‘good debt’. We explore in this article whether that is actually the case.

Who is eligible?

The NSW Government has outlined the eligibility criteria (below).

  • singles aged 50 and over
  • single parents of a dependent child
  • first home buyer key workers employed as:
    • police officers
    • paramedics, registered nurses and midwives
    • teachers and early childhood educators.

Single applicants must earn less than $93,200 and joint applicants must have a combined income of less than $124,200.

For those that are ineligible, we discuss the options between a mortgage and investing in this Investing Compass episode.

The other criteria

There are a lot more costs associated with purchasing a home aside from the deposit, stamp duty and Lender’s Mortgage Insurance. The NSW Government has outlined that all extra costs must be covered by the buyer.

These are the costs that I incurred purchasing my first home this year.

Conveyancing and property lawyer fees

$2,750 for 3 contract reviews and finalising settlement

Purchasing a home is a large commitment. You want to make sure you know what you’re getting into. We came close on two other properties before we found our home. This involved getting a property lawyer to review the contracts of the property before we put any offers in.

This fee in most cases, covers the contract reviews, liaising with agents and solicitors on any contract changes, liaising with the bank for settlement and funding and finalising settlement and any transfer of title.

Mortgage Broker

Free (Broker received a commission of $9,570, with $220 ongoing monthly from the home loan provider)

Mortgage Brokers offer a service where they find the best available interest rate with the features that you want in your mortgage. This could be an offset, or a redraw account. You may want a fixed loan, or a variable.

An offset account allows you to put funds towards your mortgage to reduce the interest payable. The funds in the account can be taken out at any time to be used for other needs. A redraw facility allows you to take funds from any extra payments that you have used for your mortgage. There are usually minimum redraw amounts.

These features may suit different buyers, but both features serve the purpose of utilising spare cash to reduce interest paid on the loan.

When choosing a mortgage broker, you have the option of paying for their services, or having a broker that receives a commission from lenders. We chose to employ a broker who received commission to understand what they could offer us. We were happy with the rate that they were able to get us so we did not have to pay a fee for broking services.

Interest rate increases


In the time that we got pre-approval to the time in which we settled, there were 2 rate rises. It is difficult to predict what is going to happen in the future. After the recent rate increases, many home buyers now are acutely aware of the mortgage stress that many Australians are facing with the unrelenting rate rises. There’s also many Australians about to face mortgage stress as we face the mortgage cliff. Ensure that you are not just budgeting on your rates staying the same. Building in a buffer to your estimated mortgage repayment amounts may seem counterintuitive to purchasing your home as soon as possible. Ultimately, it either means that you have peace of mind and you avoid financial stress, or it means that you have more to contribute to your mortgage.

Building and Pest Reports

$450 per onsite inspection

In the same vein as contract reviews, you want to make sure you are aware of any structural or pest issues that may cause large outgoing costs in the future. Building and Pest reports are sometimes already done for the property by the real estate agent but accessing them will come at a cost (usually between $100-200). If you would like an independent assessment or there is no existing report, it costs around $450 per onsite inspection.

In the process of finding your home, if you come close on multiple properties this cost can add up to thousands of dollars that you did not account for.

Settlement fees, mortgage registration, bank property fees


These costs were not communicated to me by anyone prior to searching for a home. When you’re taking out a mortgage, often the ‘small’ fees can be forgotten. When you’re saving for a house purchase, $2,600 is not a small sum of money. These fees can vary bank to bank, so ensure that you have enough of a buffer to account for these fees.

Home insurance

$850 annually - varies

Your lender will require you to have home insurance on your house by settlement. The insured amount will be on the structure and not the land, so you don’t need to insure for your whole purchase price.

Buyer’s Agent (optional)

$33,000, can range between $15,000 - $50,000

This cost is optional, and a luxury for most (including me). My husband and I had been keeping an eye on the property market and started seriously searching 18 months before purchasing a property. The Sydney market is fierce and we were not able to compete at auctions. We decided to speak to a buyer’s agent that was able to source off market properties and negotiate on our behalf prior to properties going to auction.

As well as negotiating, the buyer’s agent liaised with the property lawyer and the broker, the real estate agent and property management service, and the building and pest services. He was a licensed builder by background. This came in handy given my limited knowledge about anything construction related. He was able to help us understand any required works and assess any damage. He was also able to attend inspections mid-week while we worked, leveraging relationships to get in prior to auction.

The property we purchased was off market and it is very likely that we would not have found it without a buyer’s agent. I’ve mentioned a few times on the Investing Compass podcast that I have an ‘Investment Policy Statement’ for property. It includes not just a list of inclusions I would like in a home, but also a strict guide to price and location. The buyer’s agent was able to find a property that fit my conditions while we came up empty handed in our prior search.

Repairs and maintenance


Unless you are purchasing off the plan or building your dream home, houses have been adjusted and altered to suit the past owners or tenants. This means that regardless of structural integrity, there will always be costs to making your home your own.

We will have immediate costs after moving in to fix damage on the roof. We bought a house with no wardrobes, so they will have to be built. Our backyard is a field of dirt and mushrooms. That will have to be addressed in time. Ensure that you have enough of a buffer or earning capacity to service these needs. This can be assessed when you’re looking at properties, but it is difficult to separate logic from emotion when you’re purchasing a home.

I fell in love with a house with no usable bathroom or kitchen, and spray paint on every surface. The location was perfect and that was all that really mattered to me at that moment – everything else was fixable. We almost spent our whole deposit and borrowing power on it. I am grateful that we didn’t. Ultimately, you’re purchasing a home to live in and you want to ensure it is comfortable. Stretching yourself on your mortgage and not having a buffer to make it a home will leave you feeling stressed and disappointed.

Moving costs

$2,000 - Varies

The moving costs for us included an end of lease clean for our rental, truck rental (twice – once to the storage facility, and once home), packing tape and boxes, and storage. The costs were around $2,000. We weren’t able to immediately move into our property, and that meant that our rental lease ended prior to us getting access to the property. I am lucky that my parents live in Sydney, so I was able to stay with them for a 6-week period.



You may already have everything you need in your rental property prior to purchasing your first home. If you are living at home and moving into your first property, this would require you to purchase most of your furniture.

There will be costs to furnish your place and will vary on your situation. Think about what you would need to buy and include that in your investment goal.

Although we were able to avoid a large upfront cost with stamp duty, we still had costs that were 35% above our deposit amount. Understanding the costs past the deposit allows you to more accurately devise a plan to become a homeowner.

If you are looking to purchase your first home and have not accounted for unexpected costs, there are ways that you are able to adjust your plan:

  • Save more (additional investments to your goal)
  • Have a more realistic timeline
  • If you are still a while away from your goal, adjust your asset allocation to hold more aggressive assets.