The Cash You Need to Buy at $800,000

It depends almost entirely on the deposit route. On a 5 per cent deposit through an eligible government scheme, with no transfer duty payable at that price and no mortgage insurance, the cash needed is around $40,000 plus roughly three to five thousand dollars of conveyancing, inspection and government fees. On a 20 per cent deposit it is $160,000 plus the same costs. The costs beyond the deposit are similar either way.

Eligible first home buyers pay no transfer duty on a home up to and including $800,000 under the NSW First Home Buyers Assistance Scheme. Between $800,000 and $1 million a concession applies on a sliding scale, and above $1 million full duty is payable. Eligibility has its own conditions, including residency requirements and not having owned residential property before, and should be confirmed with Revenue NSW.

Building and pest inspections or a strata report, the rates adjustment paid to the seller at settlement, government transfer and registration fees, and moving costs. Individually they are small; together they commonly add several thousand dollars. The other one people miss is the holding deposit due on exchange, which is not an extra cost but does have to be available weeks before settlement.

The Sydney property price cap for the Australian Government deposit guarantee sits well above $800,000, so price is not usually the constraint at this level. Eligibility depends on other criteria, and the scheme is administered by Housing Australia. Where it applies, it removes lenders mortgage insurance as well as reducing the deposit, which is why it changes the cash figure so substantially.

No. A holding deposit, commonly 10 per cent of the price, is paid on exchange of contracts, and the balance is paid at settlement. The holding deposit can often be negotiated to a smaller figure, or covered by a deposit bond, which matters if your funds are tied up until settlement. Your conveyancer negotiates this as part of the contract.

Around three months of repayments is a reasonable target, and some lenders look for evidence of remaining funds as part of the assessment. Beyond the lender's view, arriving at settlement with nothing left is uncomfortable in a house that will inevitably need something in the first year. Building the buffer into the plan from the start is easier than finding it afterwards.

The purchase costs are broadly similar. An apartment needs a strata report rather than a building and pest inspection, usually a little cheaper, but brings ongoing strata levies that affect your borrowing power. Some lenders also apply size or postcode conditions to apartments. The upfront difference is small; the ongoing difference is worth understanding before you choose.

Above $800,000 the duty concession begins to taper, so duty is no longer zero but is still well below the full amount. It rises steadily to $1 million, where full duty applies. The extra purchase price also increases your deposit and your loan. Running both prices through the stamp duty calculator is the quickest way to see what the difference actually costs.