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LMI and Stamp Duty Explained in Plain English

Confused by LMI and stamp duty? Darwin mortgage broker Bibiyan Thapa explains both costs in plain English — including how to avoid LMI and a full state-by-state stamp duty guide for first home buyers in 2025.

Bibiyan Thapa

6/10/20262 min read

When you are buying a home, two costs often catch buyers completely off guard: Lenders Mortgage Insurance (LMI) and stamp duty. Together, they can add tens of thousands of dollars to your purchase — sometimes more than $50,000. Understanding them early means you can budget accurately, avoid nasty surprises at settlement, and take advantage of every concession available to you. As Darwin's trusted mortgage broker, I walk every client through these costs before they sign anything. Here is what you need to know.

What Is LMI?

LMI stands for Lenders Mortgage Insurance.

Here is the part most people do not realise: LMI protects the bank — not you. But you are the one who pays for it.

If your deposit is less than 20% of the property price, your lender will usually charge LMI. The smaller the deposit, the higher the cost — and because LMI is typically added to your loan, you also pay interest on it for the life of the loan.

How Much Can LMI Cost?

$400,000 property — 5% deposit: ~$12,711 | 10% deposit: ~$6,743 | 15% deposit: ~$3,295

$500,000 property — 5% deposit: ~$15,889 | 10% deposit: ~$8,429 | 15% deposit: ~$4,118

$600,000 property — 5% deposit: ~$22,789 | 10% deposit: ~$11,772 | 15% deposit: ~$5,942

$700,000 property — 5% deposit: ~$30,676 | 10% deposit: ~$14,912 | 15% deposit: ~$7,932

$800,000 property — 5% deposit: ~$34,983 | 10% deposit: ~$18,115 | 15% deposit: ~$9,568

$900,000 property — 5% deposit: ~$39,356 | 10% deposit: ~$20,380 | 15% deposit: ~$10,764

Figures based on Helia / QBE lender rate card (May 2026). Estimates only — actual costs vary by lender and circumstances.

How Can You Avoid LMI?

Save a 20% deposit

Use the 5% Deposit Scheme (government guarantees part of the loan)

Use a family guarantee

Qualify for a professional LMI waiver (available to certain occupations)

Use the Help to Buy shared equity scheme

Darwin tip: Combining the 5% Deposit Scheme with the NT $50,000 HomeGrown Territory Grant is one of the most powerful combinations available to first home buyers in Australia right now.

What Is Stamp Duty?

Stamp duty — also called transfer duty — is a government tax you pay when you buy property. Every state and territory sets its own rules, and the amounts can vary significantly.

The good news: first home buyers often receive substantial concessions or full exemptions, particularly on new homes.

First Home Buyer Stamp Duty by State

NSW — $0 up to $800K (new homes), concession $800K–$1M

VIC — $0 up to $600K, concession $600K–$750K

QLD — $0 no price cap from 1 May 2025 (new), $0 up to $700K (existing)

WA — $0 up to $600K from 7 May 2026

SA — $0 no price cap (new homes only), no concession on established

TAS — $0 up to $750K, expires 30 June 2026

NT — $0 via House and Land Package Exemption, no price cap, expires 30 June 2027

ACT — $0 up to $1,020K via HBCS, income tested under $250K

Get a Clear Picture Before You Buy

LMI and stamp duty do not have to catch you off guard. With the right advice before you start, you can budget accurately and take advantage of every concession available to you.

At Aussie Wealth Home Loans, I can calculate your deposit requirements, estimate LMI, check stamp duty and identify which grants apply to your situation — all in a single free consultation.

Book your appointment at aussiewealthloans.com.au/appointment or call +61 450 979 095 today.