Costs associated with buying a house.

First Home Buyers be aware – the sales price is not the final price when purchasing a house. There are many services and additional fees associated with the buying process, so you will have to save more than just the deposit.

Be prepared  –  you may be in for a shock.

Lets do a quick calculation.

  • Property value $600,000
  • First Home Buyer
  • Established Property
  • Location NSW
  • Primary Residence. You plan to live in the property for the first 12 months.
  • Deposit 10%  ($60,000)
  • Loan Amount $540,000
  • Interest rate of 5%
Stamp Duty on the Property$22,490
Mortgage Registration Fee$136.30
Transfer Fee$136.30
Total Government Fees$22,762.60
Lenders Mortgage Insurance$12,042.00
Additional Costs$3,000 to $4,400
Estimate Total$37,804.60 to $39,204.60

Stamp Duty: Between 0 – 3% of the loan amount plus 2 – 6% of the property value.
Stamp Duty is a property transaction tax, charged by the government on your property purchase value and your loan amount. The amount of stamp duty your loan and property will attract varies by state and will depend on the type of property, the value of the property and if it’s your primary residence. Calculate your stamp duty using our stamp duty calculator.

The government will also change a transfer registration fee (which will vary by state) to cover the transfer the land title from one person to another – $64 – $2,000.


Lender Mortgage Insurance (LMI): 1 – 3% of the loan amount

Lenders Mortgage Insurance Is an insurance to cover the financial institution in the event that you, the borrower, cannot make your home loan repayments. It does not cover you or your loan repayments if you default on your loan. Go here to learn more about Lenders Mortgage Insurance vs Mortgage Protection Insurance.

The amount of LMI you pay will need to pay will depend on your financial position and your Loan to Value Ration (LVR). On average LMI will cost between 1- 3% of the loan amount. For full doc loans, with most lenders, if your LVR is below 80% (that is you have a deposit of more that 20% of your purchase price ) you will not need to pay LMI.


Loan Establishment Fee: $600 – $1000

Will vary from lender to lender and is a one-off upfront cost to establish your loan and may cover the cost of a property valuation and bank legal fees.


Property Valuation Fee: $300 – $400

Your lender may engage a third-party property valuer to determine the true value of the property and how much they are willing to lend you against the valuation.


Pest Inspection: $200 – $300

When purchasing a property, organise a pest inspection, as it will save you from the cost of dealing with the problem  after you purchase the property.


Building Inspection: $400 – $500

It is important to get a building inspection to check that the building is structurally sound and conforms with the Australian Building Code. You don’t want deal with the cost of unsafe renovations done by the previous owner.


Conveyancing & Searches: $1000 – $1500

You will need to appoint a conveyancer, a solicitor that will work directly with your lender and handle the legal legalities of transferring the property ownership.  The conveyancer will lodge the contract of sale, research the property title, calculate the adjustment of rates and taxes and put your deposit in a trust account. On settlement of the property, the conveyancer will confirm the transfer of funds from your lender to the seller and that all fees and Stamp duty are paid.


Loan Service Fees

Each lender will charge different costs to service your loan. Talk to your ACA Mortgage Broker, as they will be able to advise of different loan products and associate fees and recommend a loan that suits you.  If you are unsure of any fees attached to your final loan contract, discuss this with your conveyancer.


Loan Product Features

If your loan has special feature like 100% offset or redraw facilities, lenders may charge additional loan fees to provide access to these loan services. Talk to your ACA Mortgage Broker about different loan products available and we can taylor a loan to suit your financial requirements.


Council and Water Rates: $500 – $700

On the date of settlement you are required to pay the remainder of the property water and land rates to the vendor.  The amount will vary depending on the property location and governing council.


Building Insurance

As a requirement of getting a home loan the lender will require you to organise home building insurance, effective from the exchange of the contract of sale. Check with your ACA Mortgage broker if the lender requires home insurance for the life of the loan.


Other costs to consider…

Moving Costs

The cost of moving can add up, especially if your moving interstate or transition between properties and short term storage is required.  You can save some money with the DIY approach, or hire a professional removalist.


Contents Insurance

While not essential, you should consider taking out Contents insurance effective from the day you move in.  You want to protect the contents that you put into your new home.


Mortgage Protection Insurance
While not essential, you may wish to consider Mortgage Protection Insurance which covers your mortgage repayments if you are unable to work due to injury or illness.


Utilities Connection Costs

When you move in to your new home, you want to be able to turn on the lights. Don’t forget contact your Utility providers ( Electrical, Gas, Phone and Internet, Pay TV ) to have your accounts transferred or to setup new connections.