10 Hidden Costs of Buying A Home
When it comes to buying a house, saving for a deposit and meeting monthly mortgage repayments are generally well-known costs. But it's important not to overlook the additional outgoings that can come with becoming a property owner.
We understand that being fully informed is key. That's why we've prepared this comprehensive guide to help you uncover the hidden costs involved so you can plan your finances more effectively and hopefully avoid any unwelcome surprises down the track.
1. Conveyancing & Legal Fees
2. Stamp Duty
Stamp duty can be one of the largest upfront costs associated with buying a house. The amount you'll pay varies based on factors like the property's value, location, and whether you're a first home buyer. As an example, for a property valued at $500,000, stamp duty could cost in the region of $25,000, depending on the state or territory and if the purchaser is a first home buyer or not^. Try out stamp duty calculator to work out how much you may need to pay.
There are some situations when buyers will not be required to pay stamp duty. As of 1 July 2023, the First Home Buyers Assistance Scheme (FHBAS) means that properties purchased in NSW worth up to $800,000 will be exempt from stamp duty, with further concessions applying to properties worth up to $1m.
3. Pest and Building inspections
4. Mortgage registration and transfer fees
5. Home loan fees
6. Lenders' Mortgage Insurance (LMI)
7. Council and Water Rates
8. Insurance
9. Strata Fees
If you own a unit in an apartment block, it’s likely that you’ll need to pay strata fees, which go towards general management of the building and any common areas shared by tenants.
Strata fees can add up quickly, and vary depending on where you live and the type of building you live in. As a guide, you can expect to pay between 0.3 per cent to 1.2 per cent * of a property's value in strata fees - those with more amenities on-site tend to be in the upper end of this range.
10. Moving Expenses
Lastly, don't forget to consider the cost of hiring removalists for your move. Local moves can cost approximately $300 to $3,500, while long-distance or interstate moves can cost up to $6,500 or even more^.
Tip: If you’re looking to keep costs down you may decide to do it yourself – many people opt to make a few smaller trips in their own car, then hire a removalist, truck or GoGet van for the larger items.
We’re here to help
Being aware of the hidden costs when buying a house could help with effective budgeting and financial planning. Understanding these fees, costs, and charges could help you to make informed decisions and potentially avoid any unexpected financial burdens.
At Pepper Money, we're dedicated to supporting you throughout your homeownership journey. For more information on our range of home loan options get in touch with our lending specialists on 137 377. Alternatively, get started by finding out how much you might be able to borrow with us using our online calculator.
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Whether you’re confused the purchase process, wondering what LMI or LVR mean, or are looking for help along the way, our resources are here to make sense of all that finance jargon.
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