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The hidden costs of buying a home

Buying property is likely to be one of the biggest financial decisions you’ll make. Saving up for a deposit can be a daunting task, but it’s important to know that the deposit isn’t all you’ll need to save for.

There are a range of additional costs involved in buying and selling property – from government taxes and fees, to purchase costs, to lender charges. So let’s make sure you’re prepared for all the costs involved in buying and selling.

Government costs

When it comes to buying property, there are a number of taxes and fees that you’ll be charged by the government. These costs will vary depending on the state or territory where you’re buying or selling property.

We’ve given a quick summary of the different costs below, but be sure to check the website for your state/territory for more information: NSW, VIC, ACT, QLD, SA, WA, NT, TAS

Stamp duty

The tax charged on processing certain transactions, including buying/selling property. The laws on stamp duty are changing all the time, so be sure to check the website for your state or territory to get the latest information. You can also use our handy Stamp Duty Calculator. And remember, if you’re a first homebuyer you may be able to get some help from the government.

Title search fee

The fee to search for information on the legal identification, ownership and legal history of a property.

Property transfer fee

The government fee that’s charged to cover the costs of transferring a property’s title between owners. The cost of this changes from state to state, so be sure to check in on the website of your state or territory.

Mortgage registration fee

A small fee paid, usually by your lender on your behalf, to your state or territory’s Land Registry to register your mortgage.

Purchase costs

Throughout the home buying process there are a number of additional costs that you’ll need to factor in. While these charges aren’t as big as something like stamp duty, it’s important to budget them in so you have the funds to do good due diligence.

Inspection fees

The cost of building and pest inspections when you’re buying a torrens property (i.e. when you own the land and the building). If you’re buying a strata property, you won’t need to organise separate inspections but will need to read through the strata documentation. You can usually access this for free through the real estate agent, however sometimes a small fee is charged.

Conveyancing fees

The amount paid to a licensed conveyancer or lawyer to review your contract, check the property title, draft settlement documents, and generally handle the property transfer process.

Moving costs

Once you’ve got all your ducks in a row and are ready to move in, don’t forget that you’ll likely need to hire removalists to help you get all your stuff into your new house. There may also be some additional costs for connecting utilities like electricity, gas, water and internet that you’ll need to watch out for.

Loan costs

Once you’ve purchased your dream home it’s time to organise your mortgage. Whether you’re refinancing or opening a new loan, there are some additional lender-related fees that you should be aware of.

Valuation fees

The fee charged to get an independent valuation of a property as part of the home loan approval process. This will likely be covered by your lender, though you can choose to organiseorgnaise your own valuation – just know it would add an additional cost.

Loan application fee

Once you’ve decided on your home loan, you may be charged a fee by your lender to process and set up the loan. The amount will vary depending on your loan and your lender – for example, we’ve said goodbye to application fees on all of our home loans.

Lenders mortgage insurance (LMI)

If you’re borrowing more than 80% of your property’s value, you’ll need to pay for LMI. It’s a one-off fee – usually equivalent to 1-3% of your loan amount – that you can either pay upfront or add to your home loan to protect your lender if you’re unable to make repayments down the line. If you’re able to save up for the normal 20% deposit, this cost won’t apply to you.