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Buying A Property – The Hidden Fees & Costs

How much does it cost to buy a property?

We're all aware of rising house prices and staggering medians – $1.1 million in Sydney for example – but what is the cost of buying a house after the tax office, revenue office, lender, lawyer, and conveyancer have all taken their share? Here's a roadmap showing you how the list price of your first home is only the beginning of your outlay.

Find a balance between the lifestyle you want and what you can comfortably afford.

Know why you're buying

Reflect on why you want to buy. Are you planning to grow your family? Do you want to renovate? If you're buying with a partner, talk about this together. Being clear about why you're buying helps narrow down your property search.

Make a list of your 'must-haves' (can't do without), e.g. property size, layout, public transport, schools' nice-to-haves' (could do without for now), e.g. design, fittings, outdoor space

Focusing on your must-haves will help you prioritise the things that matter most.

Once you’ve established the above two points, the first step is to get your finances sorted. Do a budget to identify how much you can afford to save for your deposit.


There's no way around it – getting your deposit together is tough work. Then, once you've finally saved enough, you're hit with an array of other upfront costs. 

If you've saved an adequate deposit and you're ready to buy a home, you may think you've calculated all your costs. But the deposit is only one of your upfront costs. From government charges to lender fees, insurance to inspections, there are many extra costs associated with buying a house.

Cost of buying a house: big business means big government

Your state or territory government revenue office will charge stamp duty (just like that on a car, if you've ever bought from a private seller). This varies from state to state. 

Outside the deposit, that'll be your highest upfront cost. Stamp duty varies greatly from state to territory to state and the rules (and exemptions) can seem complicated. Check out the government websites of your state or territory. But be warned: the various schemes change almost yearly so you'll need to check and double-check.

Do some house price research. Getting a general idea of house prices helps you set a goal to work towards. A great savings goal for a house deposit is 20% of the purchase price, plus enough to cover buying costs.

buying property online

Research Costs

Information costs. If you want to access suburb property reports from sources such as CoreLogic RP Data, you may need to pay a fee. Budget $150 per suburb report. If you accessed one property report per month, this would be a monthly cost of $150. If it took you a year to find the right property, your information cost would be $1,800. Some sources offer these reports for free, such as Residex, but the level of data offered may be lower.

Know what exemptions you’re eligible for

First Home Buyers Grant

It can be pretty daunting for first home buyers, but remember the First Home Owner Grant may assist with stamp duty costs. See if your eligible to purchase your first home with a deposit of as little as 5% with the first home loan deposit scheme

The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on homeownership. It is a national scheme funded by the states and territories and administered under their own legislation.

Under the scheme, a one-off grant is payable to first homeowners that satisfy all the eligibility criteria.

For example, if you live in NSW, you're in luck: the State Government has abolished stamp duty for first home buyers on homes worth up to $650,000. For a house worth $700,000, your mortgage registration fee, transfer fee and stamp duty will cost you about $27,267. However, with a $16,500 government concession, this comes to about $10,767. 

As of October 2014, if you're a first home buyer buying a $400,000 home, your stamp duty will range from nothing (Queensland and West Australia) to approximately $16,330 in South Australia. But many first homebuyers qualify for grants and exemptions.

Other Government charges

  • Stamp duty. Stamp duty varies from state to state, and most states offer exemptions and concessions for first home buyers.
  • Title transfer fees. This fee also varies from state to state, but usually runs between $100 and $140.
  • Registration fees. This fee registers your property as the physical security for your home loan. It typically costs between $115 and $140, though in some states it can be close to $200.

Bank Charges

Interest Rates

Interest rates vary and the property market goes up and down. It's common to worry if it's the 'right time' to buy. What matters is you're making a start, and you'll be ready in your own time.

Loan Pre-Approval

Consider getting loan pre-approval from a lender. They'll ask for evidence of your current financial situation to assess your ability to repay the loan. Pre-approval lasts for 3–6 months and shows you're eligible to apply for a loan up to a certain amount. It doesn't commit you to a loan. It lets you set an affordable price range, and tells sellers you're serious about buying.

hands exchanging house and money

Mortgage Insurance

Paying insurance for your first home…against yourself

Contact at least two different lenders to get loan options personalised for your situation. A rate of even 0.5% lower could save you thousands of dollars over time. See choosing a home loan.

Banks will charge a mortgage establishment fee, which can cost at least $500. To save headaches later, it's worth getting a pre-purchase inspection done to make sure your structure is sound. Depending on where you live, this can cost anywhere from $300 to $1,000.

If you are getting into the property market without a 20% or higher deposit (which is many of us), you will have to purchase Lender's Mortgage Insurance, which can add significantly to the cost of buying a house. 

Another one of those state/territory fees, though thankfully it's not a biggie. On that $400,000 house, the cost ranges between $107 (NSW) and $189 (Northern Territory).

If you get a 20% deposit together, you usually won't need Lenders Mortgage Insurance. But homebuyers with a smaller deposit will. This is a one-off fee equivalent to between 1-3% of your loan amount.

This is insurance against the borrower (you) defaulting – which means failing to pay back the loan. Using our example home of $650,00, LMI will come to about $25,025 on a $50,000 deposit (14% of the total value of the home). You can reduce that amount with more of a deposit, or with a guarantor, also known as a co-signer.

Beware: if you can't pay the loan back, your guarantor is also in trouble!

These fees are for a licensed conveyancer to review your contract, perform checks on the title, and draft the settlement documents. They basically do the paperwork. Depending on the complexity, it'll cost between $700-$2500. Learn more at the Australian Institute of Conveyancers' website.

Inspection fees. Before signing a contract for a home, it's wise to have building and pest inspections carried out. This will ensure the home you're buying is structurally sound and free from damaging pests. These inspections typically cost around $300-400.

Home and contents insurance. Before your lender will unconditionally approve your home loan, you'll need building insurance. It's also a good idea to ensure the contents in your new home. Make sure you compare home and contents insurance policies to get a better deal.

When looking for a good deal on a home loan (mortgage), the interest rate matters. A home loan is a long-term debt, so even a small difference in interest adds up over time.

Fees and other upfront costs

  • Lender fees. Lenders also have their own fees, which might include application, legal and settlement fees. Mortgage fees can cost several hundred dollars, so make sure you check the fees when you're comparing mortgages. If you plan to borrow more than 80% of the property's value, you'll also have to pay for lenders mortgage insurance (LMI) which can add thousands to your total cost.

Everyone's situation is different. How much you can afford to borrow depends on your:

  • income and financial commitments
  • house deposit, plus any other savings
  • credit score and credit report

Be realistic about what repayments you can afford. If interest rates rise, your loan repayments could go up. So give yourself some breathing room.

Lawyers, lenders, and fees

Another associated cost of buying a house is a solicitor's or conveyancer's fee, which ranges from $300 – 400. It can include legal database searches to make sure your property has no outstanding claims.

These are the fees your bank charges to set up your mortgage. Most banks charge additional fees (mortgage registration, loan service fee etc.) so ask them to itemise everything. Also ask if they offer reduced-fee deals or packages.

couple sitting on floor during house renovation

Moving costs 

Unless you have a large vehicle and some very understanding friends, you'll likely have to pay a removalist service to help you move home. Depending upon the size of your move, a removalist can cost anywhere from a few hundred to a few thousand dollars.

Building Inspection

A thorough building inspection is essential. You might be tempted to skip a pest inspection, but the average termite colony costs $7000 to remove.

As you can see, the cost of buying a house adds up. Take the time to fully understand all the financial commitments there are before purchasing your first home.

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