Buying your first home in Sydney involves more than saving a deposit, with several upfront and ongoing costs to budget for before settlement. That number tends to dominate every conversation about getting into the market. What it hides is everything you pay for around it, from transfer duty and building inspections to strata levies and the quiet costs that arrive after settlement. Understanding what sits outside the purchase price lets you plan a budget that survives the first twelve months, not just the settlement date. For more on first-home buyer loan options.
What Sydney First Home Buyers Are Budgeting
Analysis reported in September 2025 indicated an average budget of approximately $804,000 among Sydney first-home buyers included in the dataset. This is not a recommended purchase price or a figure that will suit every buyer. Borrowing capacity, deposit size, property type and personal circumstances can produce very different budgets.
Two buyers paying the same price can walk away with very different cash needs. One buys a strata apartment with levies and a sinking fund; the other buys a house with maintenance, insurance and no shared upkeep. One qualifies for a duty concession; the other does not. The gap between those two outcomes is often tens of thousands of dollars, and it rarely appears in the advertised price.
Small Deposits and the Rules That Come With Them
Some eligible first-home buyers may be able to purchase with a smaller deposit through an applicable government scheme or lender policy. These pathways are not automatic, and they do not all operate in the same way. Some involve a government guarantee, while others may involve shared equity or profession-specific lender policies.
Eligibility can depend on the buyer’s income, citizenship or residency status, previous property ownership, intended occupancy, property type, location and purchase price. Lender requirements also continue to apply, including serviceability and credit assessment.
Before setting a property budget, check the current scheme rules and property-price caps through the relevant official government source. A mortgage broker can also compare participating lender requirements and explain whether lenders mortgage insurance may apply.
One option for eligible buyers is the Australian Government 5% Deposit Scheme, which may allow a first-home buyer to purchase with a deposit from 5% without paying lenders mortgage insurance. Eligibility requirements, participating lender criteria and property-price caps apply, and buyers remain responsible for meeting the lender’s credit and serviceability requirements.
Transfer Duty Deserves Its Own Line in the Budget
The First Home Buyers Assistance scheme provides a full exemption or reduced rates of transfer duty for eligible buyers in NSW, as outlined by Service NSW. For eligible buyers, a transfer-duty exemption or concession may materially reduce the upfront cost of purchasing a home.
Eligibility depends on factors such as the value of the property and your circumstances, and the rules are administered by the state, not the lender. A broker or solicitor can point you in the right direction, but the calculation should always be checked against the current Service NSW guidance for your specific purchase. If you are buying with a partner, or buying a property above the concession thresholds, budget for duty as a genuine cost rather than a hopeful zero.
Costs That Appear Between Your Offer and Settlement
The purchase price is settled in one transaction, but the supporting costs are spread across several weeks. Each one is small relative to the property, and together they can catch out a buyer who has spent every available dollar on the deposit.
- Conveyancing or solicitor fees for reviewing the contract, conducting searches and managing settlement.
- Building and pest inspections, and a strata report if you are buying an apartment or townhouse.
- Lender valuation or assessment fees, where a lender charges for them.
- Loan establishment or application fees, and any package fees attached to the product you choose.
- Lenders mortgage insurance if your deposit sits below the lender’s threshold.
- Registration and lodgement fees associated with the transfer and the mortgage.
- Settlement adjustments for rates, water and levies the seller has already paid.
- Home and contents insurance, which needs to be in place from settlement day.
Ask for quotes on each item rather than working from a general estimate. Fees vary between providers and between property types, and the only figure that matters is the one on your own paperwork.
Lenders Mortgage Insurance and the Cost of a Smaller Deposit
Lenders mortgage insurance protects the lender, not you, but the borrower pays for it. It typically applies when your deposit falls below the lender’s required percentage, and it can be added to the loan rather than paid upfront. That makes it easy to overlook, because it does not appear as a line item at settlement.
Capitalising the premium increases your loan balance and your repayments for the life of the loan unless you refinance later. Some buyers reduce or remove the cost by using a guarantee scheme, a family support arrangement or a larger deposit, subject to lender policy and eligibility. If a small deposit is the only way in, factor the insurance into your repayment calculations rather than treating it as a footnote.
Costs to Consider When Buying Your First Home in Sydney
Settlement is not the end of the spending. It is the point where the ongoing costs begin, and the first year of ownership is where they tend to bite hardest.
- Council rates and water charges, billed by the relevant authority on their own cycle.
- Strata levies for apartments and townhouses, plus the possibility of a special levy for major works.
- Building and contents insurance, which is separate from any strata policy.
- Repairs and maintenance, from a leaking tap to an appliance that gives up in month three.
- Moving costs, furniture, blinds, and the small purchases that fill a new home.
A practical approach is to set aside a modest buffer per month for the first year, on top of the levies and rates you already know about. Owners who have never held a property before are usually surprised by how quickly small maintenance items add up.
Pre-Approval, Buffer Rates and the Auction Room
Organising your finance comes first in the NSW buying process, before searching, making an offer and appointing a solicitor or conveyancer. Pre-approval can provide an indicative borrowing range, but it is not unconditional approval. Final approval remains subject to the lender’s assessment, verification of the borrower’s circumstances and acceptance of the property.
Lenders assess your ability to repay using a buffer above the actual rate, so the amount you can borrow is often lower than the amount you could technically afford. That gap is there for a reason. Borrowing at your maximum leaves nothing for a rate rise, a repair or a change in income. Before you register for an auction, ask your solicitor to review the contract and explain any conditions that apply to your situation, including cooling-off rights and what happens if financing falls through.
Where a Sydney Broker Fits Into the Picture
CBM Mortgages is a Sydney based brokerage led by Craig McDonald, working with buyers across Sydney and the Eastern Suburbs, including Randwick, Coogee, Maroubra and Malabar. The work involves comparing suitable loan products across a broad lender panel, explaining deposit and guarantee options, and setting out the costs that sit alongside the loan so you can see the full commitment before you sign.
That includes the less obvious parts: how a lender treats lenders mortgage insurance, which schemes your circumstances allow, how loan structure affects your repayments, and what your borrowing capacity looks like after the buffer is applied. A short conversation early in the process is usually cheaper than discovering a shortfall the week before settlement.
Frequently Asked Questions
How much deposit do I need to buy my first home in Sydney?
Deposit requirements vary according to the lender, loan, property and borrower’s circumstances. Some eligible buyers may be able to purchase with a smaller deposit through an applicable government scheme, while other borrowers may need a larger contribution. A larger deposit may reduce the loan-to-value ratio, potential lenders mortgage insurance and required repayments. Check the current scheme rules, property-price caps and lender criteria before setting your budget.
What is the First Home Buyers Assistance scheme?
It is a NSW scheme administered through Service NSW that provides a full exemption or reduced rates of transfer duty for eligible buyers. Eligibility depends on the property value and your circumstances. The thresholds and rules should be confirmed with Service NSW or your solicitor before you exchange contracts, because the difference between qualifying and not qualifying is significant.
Which costs do first home buyers most often overlook?
Lenders mortgage insurance, conveyancing and inspection fees, and the ongoing cost of strata levies, council rates and insurance are the usual gaps. Settlement adjustments and the first twelve months of maintenance also catch people out. Ask for written quotes on every one-off cost and set a monthly buffer for the recurring costs that start after settlement.
Should I get pre-approval before looking at properties in Sydney?
Pre-approval can provide an indicative borrowing range before you begin making offers, but it is not unconditional approval. Final approval remains subject to the lender verifying your circumstances and accepting the property. A broker can also help identify relevant deposit options and government schemes, but any offer or auction bid should allow for the conditions that apply to your situation.
