The True and Full Cost of Owning Your First Home

From the viewpoint of the inexperienced, purchasing a home is a pretty simple and straightforward process: take out a loan and use it to buy the house of your choice. Things are rarely that simple, however, as there are other costs that buyers have to consider.

Stamp duty, fees, and taxes

If you are going to buy a home, get ready to pay for stamp duty on the property’s purchase price. This fee is charged by the state or territory government, so the pricing differs depending on your location. You will also be asked to pay a registration fee to cover the cost of lodging and registering the land document’s transfer by the state titles office.

Home loan fees

Lenders can charge you a variety of fees to cover for their services. The amount and variance in fees can differ among lenders. Also, if you are borrowing more than 80% of the property’s price, you might have to pay Lender’s Mortgage Insurance, or LMI. This deposit protects your lender in the event that you default on your home loan. The price of this insurance scales with the amount your home loan covers for, so a larger loan means an equally larger insurance fee.

Other purchasing costs

You should be prepared to pay for legal fees, especially if the property is changing hands from another. Before purchasing a home, you might also have to pay for inspections that cover the structure, its foundation, and its pest situation.

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