STAMP duty is back on the table for first-time buyers of existing property after a long exemption period and come October 1, those purchasers will no longer be eligible for a $7000 cheque from Mr O’Farrell to ease the homebuying squeeze.
For a $300,000 purchase, NSW home buyers will need to front up $8990 in stamp duty on existing properties before even getting the keys to their new front door.
For a $500,000 purchase, buyers will need to find $17,990 and for a $750,000 purchase the stamp duty comes to $29,240. It’s also worth noting that that chunk of change often cannot be rolled into the mortgage.
Meanwhile, Belinda Williamson from Mortgage Choice says first-time buyers need to be savvy about all the other extras.
“There are a lot of fees people don’t think about when getting a mortgage. Of course there is the deposit, but then you’ve got the lender’s mortgage insurance, the mortgage registration fee, the application fee that some lenders will waive, then mortgage protection insurance in case you lose you job and that doesn’t even include the ongoing fees like strata and rates,” she says.
With most lending institutions requiring a 20 per cent deposit from first-home buyers, LMI is another lump sum “must” that many uninitiated buyers need to pay at the point of purchase.
“LMI protects the lender, not the borrower despite what many people think,” she says.
“It might seem like just another fee, but in a way it actually helps borrowers because if it didn’t exist then lenders would expect much more up front.”
The size of the LMI amount is calculated on the difference between the deposit given and the 20 per cent required by the institution. If, for instance, a keen first-time buyer wants to jump on the property ladder with a 15 per cent deposit, then the LMI will be determined based on the 5 per cent gap to make up the 20 per cent