The sum you’ll actually spend on buying your home will be thousands of dollars higher than the “sale” price. To avoid a nasty shock, work out the other costs ahead of time!
Taxes, fees, stamp duty and moving costs add thousands to the cost of a new home. Many first home buyers overlook these costs when planning their purchase. Knowing exactly what to expect helps you save for the deposit and avoid disappointment! Such costs include;
Lender’s Fees
Almost all lenders charge a one-off establishment fee on new home loans of between $600 and $1000. Some lenders will waive the fees to get your business. Most banks also charge monthly or annual account fees.
Before you buy, it pays to get a building and pest inspection. Building inspections range from $250 for a small house or flat, to more than $1000 for a large property. Pest inspections cost around $100.
Stamp Duty
All state governments charge stamp duty on the amount borrowed and the purchase price. The rates vary between states and depending on the price of the property, but can add between three and five per cent to the cost of an average home in Sydney or Melbourne. Refer to our stamp duty calculator for a detailed estimate!
For example, here are the costs of stamp duty on a $350,000 home with a $250,000 home loan throughout different states:
NSW: $12,181
Victoria: $17,624
Queensland: $6720
Legal Costs
The legal transfer of ownership is known as conveyancing and is generally performed by a solicitor, professional conveyancer or estate agent. It costs between $600 and $800 for an average priced home. Do-it-yourself kits are available for between $70 and $150.
Insurance
If your deposit is less than 20 per cent, your lender will probably charge mortgage insurance. This covers them in case you can’t make the payments. Fees vary depending on the lender, the purchase price and the deposit but expect to pay between $1000 and $1200 for a $100,000 home with a $90,000 home loan. Most lenders will insist you take out building insurance, plus contents and income insurance are also recommended.
Moving Costs and Agent’s Fees
Professional removalists take much of the stress out of moving house but can cost between $500 and $5000. Renting a trailer or van and doing it yourself should cost less than $500. If you are selling your home to buy another, don’t forget estate agents’ fees. Most charge a commission of 2-8% on the sale price.
Want to know more about buying your first home? Call us on 1800 803 017!
