On Sydney's North Shore, the school-zone premium is $1.3 million. At today's 6.19% home loan rate that premium costs about $80,000 a year in interest, nearly double the $45,000 a year gap between independent and government schooling for two children. Those are Cotality's July 2025 catchment figures and Futurity's 2026 cost-of-education figures side by side, and they answer a question a lot of parents are asking their mortgage broker this year: is it cheaper to buy into the zone, or pay the fees? This article prices both routes over 13 years, using Velofy's stamp duty calculator for the duty and the RBA's published loan rate for the interest.
What the School-Zone Premium Actually Is
A school catchment premium is the extra amount buyers pay for a home because its address falls inside the intake zone of a sought-after public school, compared with a similar home in the same suburb just outside the line. Cotality (formerly CoreLogic) measured it in July 2025 across nine catchments in Sydney and Melbourne by comparing median values inside each zone with comparable homes outside it. Seven of the nine carried a premium. Two were cheaper inside the zone than outside.
| Catchment (as named by Cotality) | Premium inside the zone | 15-year growth inside vs outside |
|---|---|---|
| Killara High, Willoughby Girls, Lindfield Learning Village (Sydney, combined) | $1.3 million (39.8%) | 126.0% vs 150.3% |
| Princes Hill and University High School (Melbourne) | $357,000 | 82.6% vs 106.1% |
| Cherrybrook Technology High (Sydney) | −$155,000 (cheaper inside) | — |
| Doncaster Secondary College (Melbourne) | −$48,000 (cheaper inside) | — |
The third column is the part the headlines skipped. Six of the seven catchments with a premium grew more slowly over 15 years than the streets around them. Cotality's Eliza Owen also cautioned that the premium is not cleanly a school effect: proximity to train stations and the incomes of people already living inside the zone push the same numbers. Sources: Cotality, 25 July 2025; SBS News. No 2026 update had been published as at September 2026.
What Private School Costs Over 13 Years
Futurity Investment Group publishes a 13-year cost estimate each January for a child starting school that year. The 2026 figures below include fees and extras (uniforms, devices, camps, transport, tutoring). The government column is the useful surprise: public schooling is not free, and about 90% of its cost is extras, so the amount you save by choosing the zone is the gap between columns, not the whole independent figure.
| 13-year cost, child starting 2026 | NSW | Victoria |
|---|---|---|
| Government school | $106,567 | $121,202 |
| Catholic school | $223,919 | $247,999 |
| Independent school | $401,512 | $435,902 |
| Gap: independent minus government, one child | $294,945 | $314,700 |
| Gap for two children | $589,890 | $629,400 |
Two things to hold onto. Fee inflation is running well above general inflation: the ABS secondary education CPI subgroup rose 6.6% in the year to June 2026, against 3.8% for all groups, so a 13-year total set in 2026 dollars understates what a family will actually pay. And the independent figure is a median across all independent schools; the Year 7 tuition median across published schedules is $9,488 in NSW and $11,760 in Victoria (AroundSchools, August 2026), while the schools that catchment buyers usually have in mind charge several times that. Sources: Futurity NSW 2026, Futurity Victoria 2026, ABS CPI June 2026.
Pricing the Zone Route: Melbourne's $357,000 Premium
Take Cotality's Melbourne example and put real prices on it: a comparable home outside the zone at $1,100,000 and the zoned home at $1,457,000. The premium goes on the mortgage at the RBA's June 2026 average owner-occupier rate of 6.19%. Three costs follow from that, and only one of them is ever recovered.
| Zone route, 13 years | Amount | Recovered at sale? |
|---|---|---|
| Extra stamp duty (Victoria, $1.1m to $1.457m) | $21,420 | No |
| Interest on the $357,000 premium at 6.19% | $22,098 a year, $287,278 over 13 years | No |
| The premium itself | $357,000 | Only if the zoned home holds its premium |
| Cash cost of the zone, before the premium | $308,698 |
Against that sits the fee gap: $629,400 for two children at an independent school rather than the zoned public one, or $253,594 for two children at a Catholic school. If the premium is still there when you sell, the zone route beats independent fees by about $320,000 and loses to Catholic fees by about $55,000. The whole answer turns on that "if", which is the next section.
Sydney's $1.3 Million Premium Does Not Pay for Itself
Run the same sums on the North Shore cluster, with a comparable home outside the zone at $3,270,000 and the zoned home at $4,570,000. Interest on the $1.3 million premium is $80,470 a year, or $1,046,110 over 13 years. The extra stamp duty is $158,038, because NSW premium property duty applies above about $3.9 million and the premium is taxed at the top rate. That is roughly $1.2 million of cash cost before the premium itself, against a two-child independent fee gap of $589,890. The fee route is cheaper by more than $600,000, and it stays cheaper even if the zoned home returns every dollar of its premium at sale.
The comparison flips at the scale of the premium, not at the choice of school. Interest is charged on the premium every year whether or not a child is enrolled, while fees stop when school ends.
The Growth Question Decides It
The zone route only works if the premium survives to sale day. Cotality's 15-year data is the best public evidence on that, and it points the wrong way for zone buyers: the Melbourne cluster grew 82.6% inside the zone against 106.1% outside it. On the $1,100,000 base in the example, 23.5 percentage points of forgone growth is about $258,000, which consumes most of the $320,000 margin the zone route had over independent fees. The market backdrop makes the assumption harder still. Cotality's Home Value Index was 0.7% lower than a year earlier in July 2026 and fell for a fifth straight month in August, so a premium paid today is bought into a falling market.
None of this says the zone route is wrong. It says the decision is a bet on relative growth, and the evidence so far is that zoned homes have not outgrown their neighbours. A family that would buy in that suburb anyway, keeps the home well past the school years, and has a second child coming through is in the strongest position. A family stretching to reach the line, planning to move once the last child finishes, is paying interest on a premium it may not get back.
Enter the zoned price, the price outside the line, your state and your children. The calculator prices the duty and interest, counts the public school's own costs, and shows the growth rate the home needs to beat the fees.
Before You Choose
- Price the premium honestly. Get sold prices for like-for-like homes on both sides of the boundary, not the suburb median. Cotality's figures are averages across a zone.
- Add the duty. Duty is charged on the whole price, so the premium is taxed at your state's top rate for that price. Check the Victorian or NSW figure for both prices.
- Count the interest for the years you will hold it. Multiply the premium by your rate. The loan calculator shows the repayment difference between the two loan sizes.
- Count government-school extras. Futurity puts them at over $100,000 across 13 years. The saving is the gap, not the whole fee.
- Model the exit. The property sale profit calculator shows your walk-away figure at your own growth assumption, and two more years of holding often matter more than the premium.
- Check the boundary is current. Intake zones are redrawn as schools open and fill. The NSW and Victorian education departments publish the current maps.
Frequently Asked Questions
What is a school catchment premium?
A school catchment premium is the extra amount buyers pay for a home because its address is inside the intake zone of a sought-after public school, compared with a similar home in the same suburb just outside the boundary. Cotality's July 2025 research measured it at $1.3 million (39.8%) for Sydney's Killara High, Willoughby Girls and Lindfield Learning Village zones combined, and $357,000 for Melbourne's Princes Hill and University High zones.
Is it cheaper to buy in a school zone or pay private school fees?
It depends on the size of the premium and on whether you get it back when you sell. On Cotality's Melbourne example, a $357,000 premium costs about $309,000 in interest and extra stamp duty over 13 years, against a $629,400 gap between independent and government schooling for two children on Futurity's 2026 figures, so the zone route is ahead if the premium holds. On Sydney's $1.3 million premium, interest alone is about $80,000 a year, and the fee route is cheaper by more than $600,000.
Do homes in popular school zones grow faster in value?
Not on the evidence available. Cotality's July 2025 study found that six of the seven catchments carrying a premium had weaker capital growth over 15 years than the surrounding areas. The Sydney North Shore cluster grew 126% inside the zone against 150% outside it, and the Melbourne cluster 82.6% against 106.1%. Two catchments, Cherrybrook Technology High and Doncaster Secondary College, were cheaper inside the zone than outside.
How much does private school cost over 13 years in Australia?
Futurity Investment Group's January 2026 estimates for a child starting school in 2026 are $401,512 for an independent school in NSW and $435,902 in Victoria, including fees and extras such as uniforms, devices, camps and transport. Catholic schooling is $223,919 in NSW and $247,999 in Victoria. Government schooling is not free either: $106,567 in NSW and $121,202 in Victoria, about 90% of it extras rather than fees.
How much extra stamp duty do you pay on a school-zone premium?
Stamp duty is charged on the full purchase price, so the premium is taxed at the top marginal rate for that price. On a $357,000 premium in Victoria, taking a home from $1.1 million to $1.457 million, the extra duty is $21,420. On Sydney's $1.3 million premium, taking a home from $3.27 million to $4.57 million, the extra duty is $158,038 because NSW premium property duty applies above about $3.9 million. Velofy's stamp duty calculator gives the figure for any pair of prices.