Can conveyancing fees be added to mortgage?

There is a special kind of glow that comes with winning a Melbourne property. Maybe you edged out the last bidder at a Carlton auction, or secured an off market gem in Bentleigh. Either way, euphoria can fade the moment you meet the long list of extras that sit outside the headline price. Stamp duty, inspections, bank charges, moving vans and those mysterious conveyancing fees. More than a few hopeful buyers have whispered, "Couldn't I just tuck the legal bill into the mortgage and pay it off over time?" It feels neat, but in most cases the answer is a firm "no". Below we unpack why, what the fees really cover, and how to budget so they do not derail your deposit.

What Conveyancers Do in Plain English

Imagine buying a house as a relay race. Your lender, real estate agent, search providers and settlement platform all carry the baton for a leg, but the conveyancer runs alongside each of them, making sure nobody trips. Their core tasks include:

• Contract and Section 32 review: Sifting through title details, planning overlays, and any sneaky special conditions before you sign.
• Searches and certificates: Checking rates, water, zoning and heritage restrictions that could cost you later.
• Adjustments: Calculating who pays which share of council rates and body corporate levies at settlement.
• Settlement booking: Coordinating with your lender and the vendor's solicitor to move money and lodge paperwork through the electronic platform (currently PEXA in Victoria).
• Title transfer: Making sure the property officially shifts into your name with Land Use Victoria.

Conveyancers charge two parts: a professional fee for their expertise and disbursements  out of pocket costs they must pay to agencies on your behalf. The disbursements are not optional, and the conveyancer does not mark them up; they pass them straight on.

Melbourne Conveyancing Costs in 2025

You will find a spread, but for a standard house or flat expect:

• Professional fee: $1,100 to $1,900, depending on complexity, urgency, and location.
• Disbursements: $400 to $700 for title search, planning certificates, water rate certificate, settlement platform fee and the like.

Higher figures normally appear when the property involves an owners corporation, a heritage overlay, or an off the plan contract that needs multiple amendments. Always ask for a written quote that separates labour and disbursements it makes comparisons clearer and avoids surprises.

When Conveyancing Fees Are Due

Many firms request a small retainer often between $200 and $300 when you engage them, mainly to cover early searches. The balance usually lands a few days before settlement and is paid from the money you bring to settlement rather than from the loan funds. If you are selling at the same time, the fee may be deducted from sale proceeds instead. Either way, regulators view the cost as an upfront obligation, because settlement cannot complete until every invoice is covered.

Why Australian Banks Won't Add Conveyancing to Your Mortgage

Home loan structures in Australia are tightly regulated, and lenders treat only certain charges as part of the borrowing cost. They might allow you to capitalise their own application fee or even lender's mortgage insurance, but conveyancing sits outside their control. Here is why:

1. Security and collateral: The mortgage is secured against bricks and mortar. Legal work does not improve the asset's value, so the bank sees no reason to advance funds for it.
2. Tax rules: The Australian Taxation Office classifies conveyancing fees as a capital expense. That means they become part of the property's cost base for capital gains tax, rather than an immediate borrowing expense. Banks mirror this distinction.
3. Risk management: Allowing thousands in third party fees to sit on the loan inflates the loan to value ratio. Lenders prefer to keep headroom for genuine property value shifts or unavoidable bank imposed charges.

The "Borrow Extra" Strategy Pros and Cons

Some buyers still manage to cover legal fees with loan money by simply increasing their borrowing figure, then paying the conveyancer themselves on settlement day. Lenders may permit this if the adjusted sum stays within their maximum loan to value ratio, but it is worth running the numbers. An extra $2,000 borrowed over 30 years at 6 percent interest comes to roughly $2,300 in interest you are doubling the original fee. For many households that money can be saved quicker than it can be repaid.

Smart Ways to Budget for Conveyancing Fees

Rather than fight the bank's policy, you can soften the hit by planning earlier:

• Build a settlement buffer: A good rule of thumb is to set aside 5 to 7 per cent of the eventual purchase price to cover stamp duty, legal fees, inspections, and moving costs. Treat that buffer like part of the deposit: untouchable until needed.
• Park the cash in an offset: If your loan offers a 100 percent offset, place the buffer there. You will shave interest while waiting for settlement day, then release the funds with one transfer.
• Ask for staged invoicing: Some conveyancers allow deposit now, balance later. It does not alter the total cost, but it spreads the cash flow.
• Leverage first home concessions: In Victoria, first time buyers purchasing under certain price caps may receive a stamp duty discount or exemption, freeing cash that can cover legal fees.

Investment Property vs Owner Occupier Tax Implications

If the property will be rented out, the conveyancing fee adds to your cost base and will chip away at any capital gain when you eventually sell. You do not claim it as a yearly deduction. For owner occupiers, the main residence exemption usually means you will never see the fee again, except perhaps as a polite line on an old invoice. Either way, paying it upfront keeps you on the right side of tax law.

Choosing the Right Melbourne Conveyancer

Price matters, but it is not the whole story. Look for:

1. Local knowledge: Someone who often deals with the councils where you are buying Boroondara, Moreland, Casey will know local quirks.
2. Clear communication: You want plain spoken updates, not legal jargon or long silences.
3. Fixed fee transparency: A single figure for labour, plus a schedule of disbursements, avoids the "meter running" feeling.
4. Accessible support: You should be able to pick up the phone and speak to the person handling your file, not a call centre queue.

Melbourne Property Purchase Timeline and Costs

Real Melbourne Property Purchase Case Study

Jade and John, a young couple from Preston, bought a two bedroom unit for $750,000. Their conveyancer quoted a flat $1,350 plus an estimated $520 in searches. Rather than inflate the mortgage, they opened an online saver, labelled it "Settlement Cache", and drip fed $100 a week while house hunting. By the time their offer was accepted they had $2,200 on hand. It sat in their offset for two months, shaving about $40 in loan interest, and moved out two days before settlement with a single click. They never felt the sting, and their loan stayed lean.

Key Takeaways: Melbourne Conveyancing Fees and Mortgages

• Conveyancing fees in Melbourne often sit between $1,100 and $1,900, with disbursements adding $400 $700.
• Banks almost never pay a third party legal invoice from loan funds, so plan for an upfront cost.
• Borrowing more to cover the fee is possible, but you will pay interest on that money for decades.
• Early budgeting and an offset account keep the expense painless and interest efficient.
• Choosing a communicative, local conveyancer can save stress when settlement week arrives.

Expert Melbourne Conveyancing Services

Every purchase comes with its own wrinkles: heritage overlays in Clifton Hill, leasehold land in Docklands, subdivisions in Officer. If you would like down to earth guidance on what your conveyancing will cost, plus a complimentary check of your Section 32, speak with Pearson Chambers Conveyancing. Our Melbourne team explains the legal bits in everyday language and provides fixed fees that never swell halfway through the job.

Contact Pearson Chambers Conveyancing today
Phone: 03 9969 2405
Email: contact@pearsonchambers.com.au