Costs of buying a house or unit
Your guide to the costs and fees associated with buying a house or unit, plus a budgeting spreadsheet to help you calculate them.
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The costs involved in buying a house can quickly add up. In fact, it can be a surprise to people who have saved an adequate deposit and think they're ready to buy a home, only to discover there's more to pay!
Recent research from Finder shows that property buyers are paying upwards of $6,000 in upfront costs. The deposit is only one of your upfront costs. Using an upfront cost calculator or spreadsheet, you can work out how much you'll need to pay, from government charges to lender fees, insurance to inspections.
Finder home loans expert Sarah Megginson speaks to The Daily Mail about the hidden costs of home buying – and why first-time home buyers are being blindsided by more than $6,300 in hidden costs as they try to get a foothold on the property ladder.
Property buying cost estimates
Here's a simple breakdown of what buying a property could cost you. Keep in mind that this is just an estimate.
- Stamp duty: $10,000
- Mortgage registration fee: $150
- Transfer fee: $300
- Loan application fees: $600
- Legal fees: $330
- Lenders mortgage insurance: $4,000
Other buying costs
- Solicitor and conveyancing: $1,000
- Strata search: $0
- Home and contents insurance: $580
- Pest inspection: $300
- Moving costs: $700
- Building/council inspection: $0
- Connecting utilities: $50
- Land tax/council rates: $25
Total property buying cost estimate = $17,935
What are the upfront fees and costs of buying a house?
Beyond the cost of your deposit and home loan, there are a number of costs associated with buying a home. To get a true idea of how much your property purchase will cost, you'll need to add these up:
- Stamp duty. Stamp duty varies from state to state, and most states offer exemptions and concessions for first home buyers.
- Title transfer fees. This fee also varies from state to state, but usually runs between $100 and $140.
- Registration fees. This fee registers your property as the physical security for your home loan. It typically costs between $115 and $140, though in some states it can be close to $200.
You can use the calculator below to work out how much you're likely to pay in stamp duty, title transfer and registration fees.
Fees and other upfront costs
- Lender fees. Lenders also have their own fees, which might include application, legal and settlement fees. Mortgage fees can cost several hundred dollars, so make sure you check the fees when you're comparing mortgages. If you plan to borrow more than 80% of the property’s value, you’ll also have to pay for lenders mortgage insurance (LMI) which can add thousands to your total cost.
- Inspection fees. Before signing a contract for a home, it's wise to have building and pest inspections carried out. This will ensure the home you're buying is structurally sound and free from damaging pests. These inspections typically cost around $300-400.
- Home and contents insurance. Before your lender will unconditionally approve your home loan, you'll need building insurance. It's also a good idea to insure the contents in your new home. Make sure you compare home and contents insurance policies to get a better deal.
- Moving costs. Unless you have a large vehicle and some very understanding friends, you'll likely have to pay a removalist service to help you move home. Depending upon the size of your move, a removalist can cost anywhere from a few hundred to a few thousand dollars.
Hidden costs of buying a property
Beyond your upfront costs there are plenty of extra costs you might never have considered until you're in the middle of the home buying journey.
These hidden costs can really add up:
- Information costs. If you want to access suburb property reports from sources such as CoreLogic RP Data, you may need to pay a fee. Budget $150 per suburb report. If you accessed one property report per month, this would be a monthly cost of $150. If it took you a year to find the right property, your information cost would be $1,800. Some sources offer these reports for free, such as Residex, but the level of data offered may be lower.
- Professional advice. A licensed accountant or financial planner may charge around $200 per hour. If you visited an accountant for three one-hour sessions over a year, this would be $600. To minimise this expense, you could consult a friend or family member who has an accounting or finance background.
- Travel costs. You've really got to be there on the ground when searching for a property, but this will cost you in petrol, parking and tolls.
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