The two big levers
Lever 1: FHB concession — and the cliffs
FHB stamp duty isn't a sliding scale all the way up. VIC $750K and QLD $800K are sharp cliffs — $1 over and the concession is gone. NSW is different: it tapers from $800K to $1M, but by $999K you're already paying ~$39K (close to full duty). The valuable NSW range is $800K–$900K, not $800K–$1M.
If you're negotiating near a VIC or QLD cliff, the cliff matters more than the price. A $751K VIC purchase costs more out of pocket than $749K. Get under the threshold if you can.
Lever 2: LMI — and how to skip it
LMI (Lenders Mortgage Insurance) applies when your deposit is under 20%. It's typically 1–5% of the loan — often $15K–$35K+ on a 5–10% deposit.
The First Home Guarantee (expanded 1 October 2025) wipes LMI entirely: no income caps, unlimited places, 5% deposit, no LMI. Price caps apply by state and region — check before you sign.
LMI is often capitalised into the loan — you don't see it at settlement, but you pay it with 30 years of interest.
The deposit lever in action (illustrative, $800,000 purchase)
| Factor | 20% deposit ($160,000) | 10% deposit ($80,000) |
|---|---|---|
| Loan-to-value ratio | 80% | 90% |
| Lender's mortgage insurance | None — at the 20% threshold | Applies — often $15K–$35K+ (unless you use the First Home Guarantee) |
| Transfer (stamp) duty | Set by price and state — unchanged by your deposit | Set by price and state — unchanged by your deposit |
The deposit doesn't move the duty, but crossing the 20% line is what switches LMI on or off — so of the two levers, your deposit size is the one you most directly control.
Lender pays vs you pay
Lender pays (built into the rate): property valuation; its own title checks at settlement.
You pay (cash on the day): deposit (5–20%); transfer duty; title + mortgage registration; conveyancing + disbursements; building & pest inspection; LMI (unless using the First Home Guarantee); home & contents insurance; council rates adjustment; moving + connections. (The seller covers their own mortgage discharge.)
