The main costs to take into account when buying property are:
Purchase Price:
This is kind of obvious and rarely overlooked!
Government Costs:
– Stamp Duty + Government charges
These costs vary from state to state. In Victoria stamp duty and government fees is around 5.5% of the purchase price of the property. For example on a $600,000 home, stamp duty and fees will amount to approx. $32,500.Ā Some first home buyer are eligible for governmentĀ grantsĀ and discount on stamp duty. Ā Ā See our calculators to work out fees associated withĀ purchasingĀ property in your price range.
Loan Costs:
–Ā Lender’s Mortgage Insurance (LMI)
If you’re borrowing more than 80% of the property value (ie more than $480,000 on a $600,000 property) you will be required to pay lender’s mortgage insurance which is a one-off fee cost. The cost of LMI increases as the loan amount increases and the loan:value ratioĀ increases. The cost can be anything from a $1,000 to $30,000. See this video for more info.
– Loan Establishment Fees
Some lenders charge a one-off fee to set up the loan account. Often this is waived as the lending market is quiteĀ competitive. If not the average establishment costs are $200-$600.
Your Costs:
– Conveyancer/Lawyer
Legal fees for purchasing property amount to approx $800-$1500 but could be a lot more if purchasing property in the name of a business of company. Conveyancer deal title searches, transfer of titles and the execution of finances at settlement. Let us know if you’d like us to put you on to a good conveyancer or lawyer.
– Building/Pest Inspection
It is recommended to get a building and/or pest inspection on your purchase to ensure there is no structural issues or damage to the property. This typically costs $300-400. Ask us if you need help finding a professional to do this for you
It’s best to budget an extra 6-7% of the purchase price to cover stamp duty, conveyancing and other expenses.
Other costs to consider:
– One off costs -Moving Costs
– Ongoing costs –Ā Rates/Body Corporate Fees, utilities
– Home & Contents Insurance (or Landlord insurance for investment properties)
And of course the loan itself! See our calculators forĀ how much repayments will be. And check out our video on the cost of buying property.
