5 April 2022

Homeownership in 2022: Costs of Buying a House

Danielle Redford
Share

Let's buy a house.

Just figuratively, of course, but have you ever taken the time to research realistically the kind of sums required to even get started?

Asking prices are just that, and with many often-overlooked expenses waiting to strike, having the cash handy mid-hunt can save you tons of hassle towards settlement.

Here's everything to factor into your budget, and that usually narrows those initial 'price range' brackets as you start including the following new calculations.

Conveyancer Fees

Conveyancers are legal representatives hired to handle the formal and legal side of a property sale.

They'll prepare the contract of sale, exchange the contracts at settlement and finalise the purchase. Your solicitor is also being paid to provide advice on contract conditions and conduct miscellaneous tasks like requesting extensions for finance approval.

Conveyancers generally charge a fixed, mostly-inclusive fee; however, be sure to ask about the exact services included to avoid extra costs.

You'll likely need:

  • Approximately $1,200 - $2,000 depending on the firm.

  • Around $200 - $500 to cover a termination fee for a last-stage sale cancellation.

Pest & Building Inspections

Hiring a licensed professional to check your prospective purchase for infestations and structural damage is necessary.

You should consult a certified building inspector following an accepted offer for a clear idea of potential damage caused by poor construction, age, wear and tear, or more detrimental issues like mite infestation.

Newly-built or off-the-plan properties won't require pest and building inspections, however, purchasing virtually anything else will.

Think of it as an insightful investment so you can ponder any necessary repair works before fully committing to the purchase.

You'll likely need:

  • About $500 - $600, depending on the locality or area.

Mortgage Fees

Registration and transfer fees will need to be paid when securing your mortgage. Each state sets its own, ranging from a few hundred to a few thousand dollars.

The registration fee is payable upon the discharge of a mortgage, while the transfer fee covers the title transfer between the vendor and the new owner.

You'll likely need:

  • Between $450 and $4,700 depending on the state the property's located in.

Stamp Duty

The amount of stamp duty due on your purchase depends on the value of your property. This is a state government charge and is usually about 3% of the purchase price.

Stamp duty is probably the next heftiest expense, second to only your deposit.

This is essentially a fee applying to transferring property and land from one owner to another, usually costing thousands. Because stamp duty is a percentage-based fee, the amount you'll pay is determined by how expensive your home is.

Queensland, New South Wales, and Victoria do not require first home buyers to pay any stamp duty at all.

You'll likely need:

  • About 3% of the total purchase price. For example, a $300,000 property will see you paying around $9,000 in stamp duty fees.

Loan-Related Fees

Setting up and activating a loan also costs money.

Application and establishment fees are the two most common or standard costs when taking out a home loan. Depending on the financial institution, loan-related fees can be fixed or percentage-based.

Some special instances may influence banks or other lenders to ditch these fees, and organising finance through a broker could also have its advantages.

You'll likely need:

  • About $600 - $1,000+ depending on the lender and purchasing circumstances.

Lender's Mortgage Insurance

Lender's mortgage insurance or LMI is a bank-imposed fee payable by buyers attempting to purchase a property with a smaller deposit. Generally, lenders will only provide a maximum of 90% of the purchase price, meaning you'll need roughly a 20% downpayment to avoid it.

Most lenders incorporate lenders' mortgage insurance fees into the home loans themselves, allowing buyers to pay this off in conjunction with their monthly repayments. This increases your total borrowing costs, which in turn, ups your amount of interest payable.

You'll likely need:

  • Anywhere from a few thousand to several thousand dollars depending on a range of personal factors regarding the buyer.

Home/Contents Insurance

Immediately following the ownership exchange, it'd be wise to enquire about both home and contents insurance policies.

These are considered both upfront and ongoing costs of owning a home and are normally forgotten about amidst the excitement of purchasing a new property.

Properties part of a body corporate structure will often already include building insurance.

Contents insurance is entirely the buyer's choice but is always highly recommended.

You'll likely need:

  • Between $120 - $150 monthly for combined home and contents insurance, or around $40 - $50 monthly for contents only.

Rates & Body Corporate

Council rates and strata fees are two of the most cautiously examined costs for property buyers. After the listing price, ongoings such as quarterly rates and body corporate fees tend to be the next deciding attributes before making an offer.

Remember that these apply to you as soon as you've taken ownership, so it's important to have these sums at the ready pre-purchase too.

You'll likely need:

  • Anywhere between $400 - $4,000 per quarter for body corporate fees depending on a property's amenities and a range of other determinants.

  • Between $400 - $1100+ per quarter for combined council and water rates.

Moving In & Set-Up Costs

Occupying your new place can be almost as luxurious or budget-friendly as you please.

Consider your move's distance, whether you'll hire removalists or rent vehicles to make things easier.

One usually disregarded moving element includes people forgetting the time cost of effectively transporting their life to a new location. For example, relocating interstate could require you to take time off work to carry out, as well as see you pay big removalist bills for the trouble.

Then, you'll want to fit out and decorate, right? Did you save some cash for furniture and renovations too?

You'll likely need:

  • About $500 to $4,000 for the average local move. Relocating interstate could cost you up to several thousand on removalists alone, depending on distance and how many personnel you'll need.

So, what's the lesson?

Realising that a home's cost only begins at the listing price while understanding the true figures involved is the primary takeaway here.

Remember that maths comes before emotion, ensuring you're prioritising affordability over dreams.

Whilst allowing self-discipline to prevail and grasping the consequences of spending above your means, the main lesson is to ensure you're acquainted with the realistic costs of entering the property market.

Go and see what's around and enjoy the search!

Other Articles

  • 10 October 2019 - Adrian Atelj
    4 things first home buyers need to know
  • 9 October 2019 - Adrian Atelj
    4 tips for planning success when selling
  • 18 December 2019 - Vic Lorusso
    4 Tips to Consider When Selecting a Builder
  • 19 April 2022 - Danielle Redford
    Key questions to ask before buying a home
  • 15 December 2019 - Adrian Atelj
    8 Must Haves When Choosing A Rental Property
  • 19 April 2022 - Danielle Redford
    How to make a winning rental application
  • 16 October 2019 - Adrian Atelj
    8 tips for negotiating with selling agents
  • 7 October 2019 - Adrian Atelj
    A guide to buying at auction
  • 5 October 2019 - Vic Lorusso
    Adding a pool: will it add value?
  • 4 October 2019 - Adrian Atelj
    Are property managers worth the cost?
  • 24 November 2019 - Adrian Atelj
    Beginner’s Guide to Starting a Veggie Garden
  • 25 March 2022 - Danielle Redford
    Breaking a Lease with your Landlord Early
  • 18 April 2022 - Emma McLaren
    Understanding your home’s useable equity
  • 9 May 2022 - Danielle Redford
    How to flip property in Australia
  • 15 October 2019 - Adrian Atelj
    Gaining the mindset of a successful investor
  • 5 April 2022 - Danielle Redford
    Homeownership in 2022: Costs of Buying a House
  • 9 October 2019 - Vic Lorusso
    Hot interior styling trends for 2020
  • 12 March 2022 - Danielle Redford
    Your guide to different house types
  • 12 March 2022 - Danielle Redford
    Conveyancing: a cheat-sheet guide
  • 19 April 2022 - Emma McLaren
    How long does it take to build a new home?
  • 12 March 2022 - Danielle Redford
    How much deposit do you need to buy a home?
  • 9 May 2022 - Emma McLaren
    How much does a new kitchen cost?
  • 12 March 2022 - Danielle Redford
    What's the average cost to build a home in 2022?
  • 9 May 2022 - Danielle Redford
    The value of building an extra bedroom
  • 5 April 2022 - Danielle Redford
    How to make the most of negative gearing
  • 19 April 2022 - Emma McLaren
    How to buy property through private sale
  • 2 October 2019 - Adrian Atelj
    How to choose an investment property
  • 9 May 2022 - Danielle Redford
    How to determine the value of a home
  • 6 October 2019 - Adrian Atelj
    How to get your property ready for sale
  • 2 October 2019 - Adrian Atelj
    How to increase your return on investment
  • 5 April 2022 - Emma McLaren
    Stress-free interstate migration
  • 4 January 2020 - Adrian Atelj
    How to Negotiate a Lower Rent and Save Big
  • 24 December 2019 - Vic Lorusso
    How To Use Plants for Shade and Privacy
  • 28 November 2019 - Vic Lorusso
    Is a Low Deposit Loan Right for You?
  • 12 March 2022 - Danielle Redford
    Is It Worth Hiring a Buyer's Agent?
  • 7 October 2019 - Adrian Atelj
    How to style your home and wow your buyers!
  • 12 March 2022 - Danielle Redford
    Making an offer on a house in 2022
  • 16 October 2019 - Vic Lorusso
    Making the transition from rent to mortgage
  • 9 October 2019 - Adrian Atelj
    Market falling? Here’s what to do
  • 4 November 2019 - Vic Lorusso
    Mortgage Cashback: What’s the Catch?
  • 19 April 2022 - Emma McLaren
    How to negotiate a home purchase price
  • 15 October 2019 - Vic Lorusso
    Nine top tips for buying off the plan
  • 1 November 2019 - Adrian Atelj
    November Monthly Market Overview
  • 18 April 2022 - Emma McLaren
    Your Complete Pre-Settlement Checklist
  • 19 April 2022 - Danielle Redford
    How to prepare your home for the rental market
  • 24 December 2019 - Adrian Atelj
    Propagating Indoor House Plants with Water
  • 12 March 2022 - Danielle Redford
    Rent-to-own your own home schemes
  • 9 May 2022 - Danielle Redford
    Checklist for a rental inspection
  • 10 November 2019 - Adrian Atelj
    Storage Hacks for Babies and Toddlers
  • 25 March 2022 - Emma McLaren
    Using Super to Buy a Property
  • 19 April 2022 - Danielle Redford
    Essential tools for DIY home renovations
  • 16 October 2019 - Adrian Atelj
    The attraction of apartment living
  • 5 October 2019 - Pat Carbone
    The home buyer’s guide to stamp duty
  • 9 May 2022 - Danielle Redford
    How to carry out an end of lease cleaning
  • 14 October 2019 - Adrian Atelj
    Tips for keeping pets safe outside your home
  • 26 December 2019 - Adrian Atelj
    Top 10 Indoor House Plants
  • 3 October 2019 - Adrian Atelj
    Top tips for picking your ideal suburb
  • 19 April 2022 - Emma McLaren
    Which Property Type Should You Buy?
  • 9 May 2022 - Danielle Redford
    What you need to know about stamp duty
  • 19 April 2022 - Danielle Redford
    What’s the purpose of a sunset clause?
  • 10 October 2019 - Adrian Atelj
    Understanding supply and demand
  • 25 March 2022 - Emma McLaren
    What is a Granny Flat?
  • 9 May 2022 - Emma McLaren
    What is a private rental?
  • 19 April 2022 - Danielle Redford
    Buying a Property Under a Private Treaty Sale
  • 12 March 2022 - Danielle Redford
    Property Valuations and How They are Calculated
  • 14 October 2019 - Adrian Atelj
    What to look for when inspecting a property
  • 9 May 2022 - Emma McLaren
    A Guide to building a granny flat
  • 27 November 2019 - Pat Carbone
    When is the Best Time of Year to Sell?
  • 9 May 2022 - Danielle Redford
    I want to sell my home; where do I start?
  • 6 October 2019 - Vic Lorusso
    Which property costs are tax-deductible?
  • 10 October 2019 - Adrian Atelj
    Why selling your home is taking longer
  • 183 of 183 articles
    Copyright © 2021 Homes.com.au Limited. All rights reserved.