Can You Add Stamp Duty to Your Home Loan?

The short answer

In Australia you generally cannot add stamp duty directly to your home loan. Duty is an upfront cost payable to your state revenue office at or shortly after settlement, separate from the mortgage. What you can sometimes do is borrow a larger amount so your savings cover the duty, but this lifts your loan size and your loan-to-value ratio (LVR), which usually means a smaller deposit, possible Lenders Mortgage Insurance (LMI), and more interest over the life of the loan. (Canstar)

How it actually works

Stamp duty (transfer duty) is charged by the state or territory where you buy, and it's due as part of your funds at settlement, not something a lender bolts onto the mortgage afterwards. Lenders size your loan against the property value, then apply a maximum LVR (commonly up to 95%, or sometimes 98% with LMI capitalised). Stamp duty, conveyancing and registration fees sit outside that and come from your own cash.

So "adding stamp duty to the loan" really means one of two things:

• Borrowing closer to the maximum LVR and keeping more cash aside to pay duty. Your deposit shrinks, your loan grows, and if you cross 80% LVR you'll typically pay LMI.
• Capitalising LMI (rolling the LMI premium into the loan). Lenders often allow this even though they won't capitalise the duty itself.

There's no separate "stamp-duty loan". The duty is paid in cash; the only lever is how much of your savings you commit to the deposit versus the duty.

Two routes reduce the duty itself rather than financing it:

• First-home-buyer concessions. In NSW, eligible first home buyers pay no transfer duty on homes up to $800,000, with concessions to $1,000,000 (Revenue NSW). Thresholds differ in every state.
• Federal deposit help. The First Home Guarantee lets eligible first home buyers purchase with a 5% deposit and no LMI (the government guarantees the gap to 20%), and the First Home Super Saver scheme lets you release up to $50,000 of voluntary super contributions toward a deposit. Neither pays your duty directly, but freeing up deposit cash leaves more available for duty.

Worked example

Take an $800,000 purchase in NSW, $600,000 loan, 6% over 30 years.

Buyer	Transfer duty	LVR (loan/value)	LMI
Non-first-home buyer	$30,412	75%	$0
Eligible first home buyer	$0 (exempt ≤ $800k)	75%	$0

NSW duty on $800,000 = $11,152 + $4.50 per $100 over $372,000 = $11,152 + ($428,000 ÷ 100 × $4.50) = $11,152 + $19,260 = $30,412. An eligible first home buyer pays $0, because the price is at or under the $800,000 exemption cap.

Now suppose a non-first-home buyer wants to avoid paying that $30,412 from savings. They can't append it to the loan, but they could borrow more. Push the loan from $600,000 to $630,412 (LVR 78.8%, still under 80%, so no LMI). At 6% over 30 years:

• $600,000 repayment ≈ $3,597/month
• $630,412 repayment ≈ $3,779/month (about $182/month more)
• Extra interest over 30 years ≈ $35,000+ on that $30,412

If borrowing the duty pushes LVR past 80%, LMI kicks in too: on a $600,000 loan at 90% LVR that's roughly $10,740 (about 1.79% of the loan), which can be capitalised on top. The duty doesn't disappear; it just gets paid slowly, with interest.

Model this in True Loan

True Loan calculates duty for all eight states and territories (with first-home-buyer concessions), LMI, registration and conveyancing, and your total funds required at settlement, for free, no login.

To compare paying duty upfront versus borrowing it:

1. Set the property value, state, and tick first home buyer if eligible. Duty updates instantly.
2. Set your loan amount. To "add" duty, increase the loan by the duty figure and watch the LVR and LMI lines react.
3. Choose your rate, term and repayment frequency to see the monthly repayment and total interest.

Then open the comparison tool to put "smaller loan + duty paid in cash" beside "larger loan covering duty" and read the lifetime-interest difference directly. If you're weighing whether to throw spare cash at the loan instead, use the dedicated Extra repayment ($/month) input; to model savings parked against the loan, use the separate Offset balance input.

Common questions and mistakes

• Can I roll duty into the mortgage outright? No. Duty is paid in cash at settlement. You can only borrow more so your savings stretch to cover it.
• Does borrowing duty trigger LMI? It can. A bigger loan raises your LVR; cross 80% and LMI typically applies (it's $0 at ≤ 80% LVR).
• Do first home buyers pay duty? Often not, up to a state cap, though caps and concessions vary widely by state.
• Is the First Home Guarantee a way to fund duty? Not directly. It removes LMI and lets you buy with 5% down, freeing up cash you might then use for duty.
• Mistake: forgetting duty when budgeting your deposit. Model deposit + duty + fees together as total funds at settlement.

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Figures here are estimates for the 2025-26 financial year and general information only, not financial or credit advice. Confirm current rates with your state revenue office, moneysmart.gov.au, the ATO and Housing Australia.