The short answer
See how a $300,000 deposit impacts your loan, stamp duty, and LVR when buying an $850,000 property.
If you have sold your home and have $300,000 to put towards an $850,000 purchase, your loan would be about $603,000 with no lenders mortgage insurance. Stamp duty in Victoria is roughly $46,000 at that price, and after lender, legal and adjustment buffers your loan-to-value ratio sits around 71%.
What does the financial summary look like?
Here is a worked example for a home in Officer, in Melbourne’s south-east, at about $850,000, funded by the proceeds of a recent sale. The numbers are approximate and for illustration only.
Item | Amount |
|---|---|
Purchase price | $850,000 |
Stamp duty (VIC, approx.) | ~$46,000 |
Lender, legal and adjustment buffers | ~$7,000 |
Contribution from sale | $300,000 |
Loan amount | ~$603,000 |
LMI | Nil |
Loan-to-value ratio | ~71% |
Why is the LVR important?
The loan-to-value ratio (LVR) is your loan as a percentage of the property’s value. Below 80% you avoid lenders mortgage insurance, and lower LVRs often unlock sharper interest rates. At around 71%, this buyer sits comfortably inside the range where most lenders offer their better pricing.
What should you do with sale proceeds?
When you sell, the money left after paying out your old loan and selling costs becomes your contribution. A few things to think about:
Keep a buffer. Don’t put every dollar into the deposit; keep some in an offset account for emergencies.
Think about an offset account. Money sitting in offset reduces the interest you pay while still being available.
Time your settlements. Aligning the sale and purchase settlements avoids paying two loans or needing bridging finance.
Why does stamp duty catch people out?
In Victoria, stamp duty on an $850,000 purchase is about $46,000, and it is generally due at settlement. If you are not a first home buyer, there are usually no concessions at this price. Buyers who focus on the deposit often forget this is a separate cash cost on top.
What are the steps from here?
Confirm your net sale proceeds with your conveyancer.
Get pre-approval based on the new loan amount.
Allow for stamp duty and settlement costs in your budget.
Choose a loan structure: fixed, variable or split, with or without offset.
Line up settlement dates for the sale and purchase.
A typical Melbourne scenario
Leah and Ravi sold their Narre Warren townhouse and cleared $300,000. They found a four-bedroom house in Officer for $850,000. Their broker built a summary: $46,000 stamp duty, $7,000 in costs, and a $603,000 loan at about 71% LVR. They kept $20,000 of their proceeds in an offset account as a buffer, which lifted the loan slightly but kept them comfortable after moving in.
Key takeaways
With $300,000 from a sale, an $850,000 purchase needs a loan of about $603,000.
At around 71% LVR there is no LMI and better rates are usually available.
Stamp duty of about $46,000 is a separate cost on top of your deposit.
Keep a buffer in offset rather than putting every dollar into the deposit.
Use the stamp duty calculator and loan repayment calculator, read about upgrading your family home, or talk to our mortgage brokers about refinancing and home loans.
General information only. This article does not take into account your objectives, financial situation or needs, so consider whether it is appropriate for you and seek personal advice before acting. Elephant Financial Pty Ltd trading as Elephant Advisory is an authorised credit representative (ACR 487962) of Yellow Brick Road Aggregation Pty Ltd (formerly Vow Financial Pty Ltd) (ABN 66 138 789 161), Australian Credit Licence 390261.
Gav is the person you want in your corner when it comes to property finance. After years in banking and motor trade finance, he joined Elephant early and never looked back. He's passionate about combining property and finance to help clients achieve their goals through tailored financial structuring, and he's very serious about snacks at meetings.
