Saving for a home deposit is often the biggest focus for buyers, but many people are surprised to discover the purchase price isn’t the only cost involved.
Building inspections, borrowing costs, insurance, legal fees and government charges can quickly add up.
According to research from Finder, the average Australian home buyer may face thousands of dollars in unexpected upfront costs.
To help avoid any nasty surprises, here are some of the extra costs to consider before buying a property.
1. Stamp Duty
Stamp duty is one of the biggest upfront costs many buyers face.
It’s a government charge calculated based on the purchase price of the property and varies depending on the state or territory you buy in.
For some properties, stamp duty can add tens of thousands of dollars to your purchase costs.
However, eligible first home buyers may receive concessions, rebates or exemptions depending on their state and circumstances.
2. Borrowing Costs
Many lenders charge fees associated with establishing your home loan.
These can include:
- Loan establishment fees
- Property valuation fees
- Settlement fees
- Mortgage registration fees
The exact amount will vary depending on the lender and loan structure.
You can also use our mortgage calculator to estimate repayments and better understand your borrowing position.
3. Lenders Mortgage Insurance (LMI)
If your deposit is less than 20%, you may also need to pay Lenders Mortgage Insurance (LMI).
LMI protects the lender if you default on your home loan and can range from several thousand dollars to significantly more depending on the loan amount and deposit size.
Some first home buyer schemes may help eligible buyers avoid LMI altogether.
4. Building and Pest Inspections
A building and pest inspection is one of the most important checks before purchasing a property.
These inspections can help identify structural issues, water damage, pest activity or other hidden problems.
While inspections may cost several hundred dollars, they can save buyers from potentially much larger repair bills later.
5. Conveyancing and Legal Costs
A conveyancer or solicitor handles the legal transfer of ownership and completes searches relating to the property.
This process typically includes:
- Reviewing contracts
- Property searches
- Settlement coordination
- Transfer documentation
Costs will vary depending on the transaction complexity.
6. Insurance
Most lenders require evidence of building insurance before settlement.
As a homeowner you’ll also likely want to consider Home & Contents Insurance to protect your property and belongings.
The cost will vary depending on the property, location and level of cover selected.
7. Moving and Connection Costs
Many buyers forget to budget for moving costs.
These can include:
- Removalists
- Storage
- Utility connection fees
- Internet setup
- Cleaning costs
- Small repairs and maintenance
Individually these costs may appear minor, but together they can add up quickly.
Quick home buying budget checklist
Before purchasing a property, budget for:
- Deposit
- Stamp duty
- Borrowing costs
- LMI (if applicable)
- Building and pest inspections
- Conveyancing/legal fees
- Insurance
- Moving expenses
How QPF can help you manage these costs
QPF works with a wide range of lenders and insurers, helping buyers understand the full cost of purchasing a property rather than just the purchase price itself.
Whether you’re buying your first home, upgrading or investing, we can help you understand your borrowing options and avoid unexpected costs.
You can also book a free home loan health check or get in touch with our team today.
