The Hidden Costs of Buying & Selling a Home

Wherever possible, we try to avoid charging fees to our customers but there are still a variety of hidden costs associated with buying a home and borrowing money that you’ll need to be aware of.

These costs can be quite significant so its probably worthwhile doing your homework before you set out and make an offer on a property.

Stamp Duty

When you buy a home or take out a mortgage, you’ll most likely have to pay tax to the state government. This tax is called stamp duty and needs to be paid on the transfer of property, leases and mortgages.

The amount payable depends on which state you are in and is based on a sliding scale linked to the purchase price of the property.

If it isn’t confusing enough already, some states offer stamp duty concessions or exemptions for first home buyers. To give you an indication as to the cost in your particular state, you can use our Stamp Duty Calculator.

Mortgage Duty

As well as stamp duty on the property purchase and transfer, stamp duty is also payable when you take out a mortgage. This is normally a percentage of the loan amount and also payable by the borrower.

Again, you can use our Stamp Duty Calculator to provide you with an indication as to this cost in your particular state.

Legal Fees

Although it’s possible to do without, it’s a good idea to use the services of a solicitor or a conveyancer when you purchase a home. In addition to making your life easier and saving you time when it comes to settling your loan or purchase, these people offer you protection in the event of error or negligence that results in financial loss.

Conveyancing fees vary but we’d suggest allowing $800 - $1,200 for legal fees. Of course, this will vary depending on who you use and which state you live in.

Mortgage Insurance

If you need to borrow more than 80 percent of the property value we will require that you take out lenders’ mortgage insurance. This protects us in the event that you default and your loan exceeds the value of the property you’ve offered as security.

In our case, mortgage insurance is a one-off premium that varies according to the size of the loan and the amount you borrow as a percentage of the property value. The higher the percentage you borrow, the higher the cost of mortgage insurance. As a rough guideline, mortgage insurance is usually between 0.4 percent and 4.0 percent of the property value.

Moving Costs

Depending on your circumstances, you may need to think about moving costs. One way to save money is to hire a truck, get some friends together and do it yourself. This will only cost you $100 -$300.

If you need to use a professional moving company this can cost anywhere from a few hundred dollars to a few thousand dollars so make sure you explore the best and most cost effective option.

Building Inspection

Your solicitor or conveyancer will normally recommend you get a building inspection prior to purchasing a property. If nothing else, a building inspection will give you the peace of mind that your new home won’t greet you with an ugly surprise early on or down the track.

Building inspections usually cost between $200 and $800. You should make sure your building inspection also checks for termites.