Stamp Duty Loan? Here's How to Secure It Fast (2026)

When you're buying a property in Australia, one of the significant upfront costs you'll encounter is stamp duty. Many prospective homebuyers find themselves wondering if they can pay this hefty fee with a loan. The answer isn't entirely straightforward, but understanding your options can help you navigate this financial hurdle more effectively.

Understanding Stamp Duty and Loans

Stamp duty is a tax imposed by state and territory governments on property purchases. The amount varies depending on factors such as the property's location, price, and whether it's your first home. For many, stamp duty can represent a substantial portion of the upfront costs, sometimes tens of thousands of dollars. This can be daunting, especially when you're already stretching your budget to secure a mortgage.

Traditionally, stamp duty is expected to be paid in cash at the time of settlement. However, with the right approach and financial strategy, you can incorporate this cost into your borrowing plan. This involves understanding different loan products and leveraging your financial position effectively.

Loan Options and Requirements

While some lenders may allow you to borrow more to cover stamp duty, not all will. Let's delve into the options available and what you need to qualify:

• Home Loan with Additional Funds: Some lenders may offer the option to borrow more than the purchase price of the property, allowing for extra funds to cover costs like stamp duty. This is often possible if the property's value exceeds the purchase price or if you have a guarantor.
• Personal Loan: A personal loan can be used to cover stamp duty. These loans typically come with higher interest rates, ranging from 6.49% to 12%, and shorter repayment terms.
• Equity Release: If you're an existing property owner, you might access the equity in your home to cover stamp duty costs.

Eligibility for these options depends on several factors, including your income, credit score, existing debts, and the lender's criteria. With access to 83+ lenders through Esteb and Co, there are a variety of products available that might suit your needs.

Steps to Pay Stamp Duty with a Loan

If you're considering using a loan to cover your stamp duty, follow these practical steps to ensure a smooth process:

1. Assess Your Financial Situation: Calculate your total home-buying budget, including the deposit, stamp duty, and other costs.
2. Consult a Mortgage Broker: Engage with a mortgage broker from Esteb and Co to explore your options across their panel of 83+ lenders.
3. Choose the Right Loan Product: Based on your needs and financial position, decide whether a larger home loan, a personal loan, or equity release is the best option.
4. Apply for Pre-Approval: Get pre-approved for the loan amount you need, including the additional funds for stamp duty.
5. Close the Deal: Once your loan is approved, proceed with the property purchase and ensure the stamp duty is paid at settlement.

Expert Tips and Considerations

Navigating the complexities of paying stamp duty with a loan requires careful consideration. Here are some expert tips:

• Plan for Interest Rate Changes: If you're opting for a loan with a variable rate, be prepared for possible interest rate increases that could affect your repayments.
• Understand the LVR: Lenders will consider the Loan-to-Value Ratio (LVR) when deciding how much extra you can borrow. A lower LVR might give you more borrowing power.
• Consider Loan Product Fees: Be aware of any additional fees associated with the loan product you choose, such as application fees, ongoing fees, or early repayment penalties.
• Seek Professional Advice: Always consult with a financial advisor or mortgage broker to ensure you make the best decision tailored to your financial situation.

Frequently Asked Questions

• Can I include stamp duty in my mortgage? Yes, some lenders allow you to borrow more to cover stamp duty if you meet certain criteria.
• Are there any grants or concessions for first-home buyers? Yes, first-home buyers may be eligible for grants or stamp duty concessions, which vary by state.
• What happens if I can't pay the stamp duty upfront? You may need to explore personal loan options or speak with your lender about borrowing extra funds.
• How does stamp duty affect my borrowing capacity? Borrowing extra to cover stamp duty can impact your LVR and potentially reduce the amount you can borrow for the property itself.
• Is it better to pay stamp duty upfront or include it in the loan? Paying upfront avoids additional interest costs, but including it in the loan might be necessary if you lack the immediate funds.
• Can stamp duty be negotiated? Stamp duty rates are set by state governments and generally cannot be negotiated.
• Does stamp duty differ between states? Yes, stamp duty rates and concessions vary significantly between Australian states and territories.