The 5-7% rule of thumb exists because in most states falls between 2% and 5% of the purchase price, and the remaining costs add another 1-2%. But this range is so wide it is almost useless for planning. On a $750,000 home, 5% is $37,500 and 7% is $52,500 — a $15,000 gap that can easily be the difference between having a buffer at settlement and borrowing more than you meant to.
A first home buyer purchasing a $650,000 established home in Queensland pays $0 stamp duty .
An upgrader buying an $800,000 home in Victoria pays $43,070 in stamp duty alone
How this applies in your state
Sign up to see how this applies in your state.
New South Wales: NSW first home buyers get...
Victoria: Victoria's first home buyer...
Queensland: Queensland offers first home...
Tailored to your property journey
Sign up to see how this applies to your property journey.
First Home Buyers: Stay within your state's...
Rentvesters: Investment buyers pay full...
Stop using the "5-7% rule" as your budget
The 5-7% rule of thumb exists because in most states falls between 2% and 5% of the purchase price, and the remaining costs add another 1-2%. But this range is so wide it is almost useless for planning. On a $750,000 home, 5% is $37,500 and 7% is $52,500 — a $15,000 gap that can easily be the difference between having a buffer at settlement and borrowing more than you meant to.
A first home buyer purchasing a $650,000 established home in Queensland pays $0 stamp duty .
An upgrader buying an $800,000 home in Victoria pays $43,070 in stamp duty alone
How this applies in your state
Sign up to see how this applies in your state.
New South Wales: NSW first home buyers get...
Victoria: Victoria's first home buyer...
Queensland: Queensland offers first home...
Tailored to your property journey
Sign up to see how this applies to your property journey.
First Home Buyers: Stay within your state's...
Rentvesters: Investment buyers pay full...
.
Total transaction costs can swing from under 2% to over 6% of the purchase price on identical price points, depending on state and buyer status.
These gaps are not rounding errors. They are the difference between being on track and being short at settlement, and the only way to know which side you land on is to add up each line item for your specific situation.
The checklist that replaces the rule of thumb
The 5-7% rule treats every buyer the same. Your actual costs depend on which state you are buying in, whether you qualify for first home buyer concessions, and whether your deposit is below 20%. The checklist below is the full set of line items. Fill every one in for your situation before you trust any total.
Cost item
Typical range
Notes
Stamp duty (transfer duty)
$0 – $45,000+
Biggest variable. Depends on state, price, and buyer status .
Conveyancing or solicitor fees
$1,000 – $3,000
Includes title search, contract review, settlement.
Building and pest inspection
$300 – $700
Combined report. Higher for older or larger homes.
Loan application fee
$0 – $600
Many lenders waive this. Ask before you apply.
Title registration fee
$150 – $400
Government fee to register the property in your name. Varies by state.
Mortgage registration fee
$120 – $200
Government fee to register the lender's mortgage on the title .
Lenders mortgage insurance
$0 – $30,000+
Only if your deposit is below 20%. Typically 1-3% of the loan amount .
Moving costs
$550 – $3,500
Depends on distance and how much you own .
Utility connections
$0 – $300
Some providers waive connection fees.
Lenders mortgage insurance is the wildcard. If you have a 20% deposit, you skip it entirely. If your deposit is 10% on a $750,000 loan, LMI could add $8,000 to $15,000 to your upfront costs in one line item.
Two worked examples show why the range is so wide
Consider two buyers at similar price points. The difference in their total transaction costs is not a quirk of the market — it is the direct result of state concessions and deposit size.
Example 1: First home buyer in Brisbane, $650,000. You are buying a $650,000 established house in Brisbane with a 15% deposit ($97,500) and you qualify as a first home buyer.
Cost item
Amount
Stamp duty
$0 (QLD first home concession, established homes under $700,000)
Conveyancing
$1,800
Building and pest inspection
$500
Loan application fee
$0 (waived by lender)
Title registration
$250
Mortgage registration
$200
LMI (15% deposit, $552,500 loan)
~$7,500
Moving costs
$1,200
Total transaction costs
~$11,450
That is 1.8% of the purchase price. The "5-7% rule" would have told you to save $32,500 to $45,500. The real figure is far lower because Queensland's first home buyer stamp duty concession wipes out the single biggest cost. If you also skip LMI by saving a 20% deposit, total costs drop to roughly $3,950.
Example 2: Upgrader in Melbourne, $800,000. You already own a home and are buying an $800,000 house in Melbourne with a 20% deposit ($160,000).
Cost item
Amount
Stamp duty
$43,070 (VIC standard rate, no first home buyer concession)
Conveyancing
$2,200
Building and pest inspection
$600
Loan application fee
$600
Title registration
$350
Mortgage registration
$120
LMI
$0 (20% deposit)
Moving costs
$2,000
Total transaction costs
~$48,940
That is 6.1% of the purchase price. This time the "5-7% rule" is roughly correct because full stamp duty applies with no concessions. Stamp duty alone makes up 88% of the total.
Stamp duty determines whether your total costs land at the bottom or the top of the range. First home buyers who stay within their state's concession thresholds can cut transaction costs by $15,000 to $40,000. Everyone else pays the full rate.
Do the maths once, on paper, now
Do not estimate stamp duty in your head. Use the official calculator for your state :
Enter your target purchase price, select whether it is your principal residence, and whether you are a first home buyer. Write the number down. Then take ten minutes — a spreadsheet or a piece of paper is fine — and fill in every other line from the checklist above. Use the midpoint of each range for the items you do not know exactly. Add them up.
That total, plus your deposit, is the real amount of cash you need at settlement. If the number surprises you, it is far better to find out now than three days before settlement.
.
Total transaction costs can swing from under 2% to over 6% of the purchase price on identical price points, depending on state and buyer status.
These gaps are not rounding errors. They are the difference between being on track and being short at settlement, and the only way to know which side you land on is to add up each line item for your specific situation.
The checklist that replaces the rule of thumb
The 5-7% rule treats every buyer the same. Your actual costs depend on which state you are buying in, whether you qualify for first home buyer concessions, and whether your deposit is below 20%. The checklist below is the full set of line items. Fill every one in for your situation before you trust any total.
Cost item
Typical range
Notes
Stamp duty (transfer duty)
$0 – $45,000+
Biggest variable. Depends on state, price, and buyer status .
Conveyancing or solicitor fees
$1,000 – $3,000
Includes title search, contract review, settlement.
Building and pest inspection
$300 – $700
Combined report. Higher for older or larger homes.
Loan application fee
$0 – $600
Many lenders waive this. Ask before you apply.
Title registration fee
$150 – $400
Government fee to register the property in your name. Varies by state.
Mortgage registration fee
$120 – $200
Government fee to register the lender's mortgage on the title .
Lenders mortgage insurance
$0 – $30,000+
Only if your deposit is below 20%. Typically 1-3% of the loan amount .
Moving costs
$550 – $3,500
Depends on distance and how much you own .
Utility connections
$0 – $300
Some providers waive connection fees.
Lenders mortgage insurance is the wildcard. If you have a 20% deposit, you skip it entirely. If your deposit is 10% on a $750,000 loan, LMI could add $8,000 to $15,000 to your upfront costs in one line item.
Two worked examples show why the range is so wide
Consider two buyers at similar price points. The difference in their total transaction costs is not a quirk of the market — it is the direct result of state concessions and deposit size.
Example 1: First home buyer in Brisbane, $650,000. You are buying a $650,000 established house in Brisbane with a 15% deposit ($97,500) and you qualify as a first home buyer.
Cost item
Amount
Stamp duty
$0 (QLD first home concession, established homes under $700,000)
Conveyancing
$1,800
Building and pest inspection
$500
Loan application fee
$0 (waived by lender)
Title registration
$250
Mortgage registration
$200
LMI (15% deposit, $552,500 loan)
~$7,500
Moving costs
$1,200
Total transaction costs
~$11,450
That is 1.8% of the purchase price. The "5-7% rule" would have told you to save $32,500 to $45,500. The real figure is far lower because Queensland's first home buyer stamp duty concession wipes out the single biggest cost. If you also skip LMI by saving a 20% deposit, total costs drop to roughly $3,950.
Example 2: Upgrader in Melbourne, $800,000. You already own a home and are buying an $800,000 house in Melbourne with a 20% deposit ($160,000).
Cost item
Amount
Stamp duty
$43,070 (VIC standard rate, no first home buyer concession)
Conveyancing
$2,200
Building and pest inspection
$600
Loan application fee
$600
Title registration
$350
Mortgage registration
$120
LMI
$0 (20% deposit)
Moving costs
$2,000
Total transaction costs
~$48,940
That is 6.1% of the purchase price. This time the "5-7% rule" is roughly correct because full stamp duty applies with no concessions. Stamp duty alone makes up 88% of the total.
Stamp duty determines whether your total costs land at the bottom or the top of the range. First home buyers who stay within their state's concession thresholds can cut transaction costs by $15,000 to $40,000. Everyone else pays the full rate.
Do the maths once, on paper, now
Do not estimate stamp duty in your head. Use the official calculator for your state :
Enter your target purchase price, select whether it is your principal residence, and whether you are a first home buyer. Write the number down. Then take ten minutes — a spreadsheet or a piece of paper is fine — and fill in every other line from the checklist above. Use the midpoint of each range for the items you do not know exactly. Add them up.
That total, plus your deposit, is the real amount of cash you need at settlement. If the number surprises you, it is far better to find out now than three days before settlement.
