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Stamp duty paused in NSW for first home buyers

Stamp duty paused in NSW for first home buyers

First home buyers rejoice. Stamp duty - one of the biggest upfront costs and barriers for would-be-buyers in New South Wales - has been temporarily axed for new homes up to $800,000.

Today’s announcement from Premier Gladys Berejikilian comes in an effort to boost housing construction in NSW, and support jobs in the building industry. The changes will apply from August 1st, 2020 and last for 12 months.

RateCity has crunched the numbers and found that for first home buyers, this change may shave over a year off the time it takes to save up a deposit.

What are the new stamp duty rules?

Previously, stamp duty exemptions applied to new homes for first home buyers up to the value of $650,000, with stamp duty concessions available for properties between $650,000 to $800,000.

Current stamp duty concessions

First home purchase priceOrdinary stamp dutySavings for first home buyers

of new dwellings*

Savings for first home buyers

of existing dwellings*


Source: NSW Government as of 2017. Notes: *Total of stamp duty exemptions plus first homeowners grant plus savings from LMI duty abolition (Genworth LMI Premium Estimator based on a first home buyer with a $50,000 deposit).

Now, stamp duty exemptions will carry up to the full $800,000 property price, with concessions available up to $1 million.

For vacant land, the stamp duty threshold will increase from $350,000 to $400,000, with concessions up to $500,000.

Also, the $10,000 first homeowners grant will still be available for those buying new properties worth $600,000 and under, or those buying land and building a new property up to $750,000.

Premier Gladys Berejikilian said the government expected “more than 6,000 first home buyers would benefit from the changes” potentially saving them thousands of dollars.

How much could this save first home buyers?

Before August 1, would-be buyers looking to get a property from $650,000 to $800,000 would have still had to pay some stamp duty costs, but they were reduced.

This meant that on an $800,000 property, first home buyers were still expected to save an additional $28,594 for stamp duty on both new and existing dwellings.

Now, these stamp duty exemptions mean for new dwelling purchases, first home buyers can not only potentially pocket that $28,594, but also shave significant time off of how long it takes to save a deposit.

Keeping in mind that these exemptions only apply for the 12 months following August 1, 2020. If borrowers were already close to saving a 20 per cent deposit, here is how much time is saved by not having to save up to pay stamp duty.

Time saved by not saving for stamp duty:

Median House PriceStamp duty concession costsNew stamp duty exemption costsTotal 20% deposit needed including stamp duty concessionsNew total 20% deposit needed including stamp duty exemptionTime taken to save based on weekly deposit of $400New time taken to save based on weekly deposit of $400Time saved with new stamp duty exemptions
$650,000$0$0$130,000$130,0005 years 11 months5 years 11 months/
$700,000$8,204$0$148,204$140,0006 years 9 months6 years 5 months4 months
$710,000$10,268$0$152,268$142,0006 years 11 months6 years 6 months5 months
$750,000$18,290$0$168,290$150,0007 years 7 months6 years 10 months9 months
$775,000$23,443$0$178,443$155,0008 years 1 month7 years 1 month1 year
$800,000$28,594$0$188,594$160,0008 years 6 months7 years 3 months1 year 3 months

Source: RateCity.com.au, NSW Government website, NSW State Revenue Stamp Duty Calculator.

Notes: Savings based on deposit of $400 per week into savings account paying 1.50 per cent per annum

Home loan rates for first home buyers

For some borrowers who choose to still save a larger total deposit size by factoring in stamp duty to their savings, this may help them to nab a more competitive interest rate from lenders.

Home loan lenders typically reward borrowers with small LVRs (loan-to-value ratio) with more competitive interest rates, as having a larger chunk of the property’s price paid off upfront presents you as a more reliable borrower.

While no low rates are ever guaranteed, it’s always worth considering making your home loan application look more desirable by saving a larger deposit, if financially possible.

Here are some of the most competitive home loan rates available to first home buyers:

Variable, owner-occupier home loans paying principal and interest

Home loanAdvertised rateComparison rate
Freedom Lend Freedom Variable Home Loan



Reduce Home Loans Super Saver



Mortgage House Essentials Low Rate Home Loan



Source: RateCity.com.au. Data accurate as at 27.07.2020.

Fixed, owner-occupier home loans paying principal and interest

Home loanAdvertised rateComparison rate
Homestar Finance Star Essentials Fixed Home Loan 2 years



HSBC Premier Fixed Rate Home Loan



Greater Bank Great Rate Fixed Home Loan



Source: RateCity.com.au. Data accurate as at 27.07.2020.

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.



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Learn more about home loans

Can I get a NAB first home loan?

The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.

Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.

If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.

The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

Can first home buyers apply for an ING home loan?

First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan. 

First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates. 

First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

Where can I get all the information about an ANZ first home buyer’s loan?

As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.

There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.

When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

What is stamp duty?

Stamp duty is the tax that must be paid when purchasing a property in Australia.

It is calculated by the state government based on the selling price of the property. These charges may differ for first homebuyers. You can calculate the stamp duty for your property using our stamp duty calculator.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

How do I apply for Westpac’s first home buyer loan?

If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan. 

You can use Westpac’s online mortgage calculators to estimate your borrowing power. You can also work out the time it might take to save up for the deposit, and the size of your home loan repayments

When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for. 

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.

How much deposit do I need for a home loan from ANZ?

Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:

  • A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
  • The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
  • If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).

How to apply for a pre-approval home loan from Bendigo Bank?

Applying for pre-approval on your home loan gives you confidence in your ability to secure finance while looking at potential new homes. You can get a free and personalised pre-approval home loan from Bendigo Bank in just a few minutes, without any credit checks or paperwork. 

Bendigo Bank offers pre-approval for home loans that allow you to understand the home loan size you may be able to get before looking for a new home. 

With the pre-approval, Bendigo Bank provides an estimate of your borrowing power. This figure incorporates stamp duty, lenders mortgage insurance (LMI) and any first home buyer incentives you may be eligible for. You may also qualify for the First Home Loan Deposit Scheme initiative, depending on your circumstances. 

To apply for a pre-approval on your home loan from Bendigo Bank, all you need to do is fill in a smart form. You could also contact the bank directly on 1300 236 344.