The True Costs of Buying Property

What does a home really cost for a first time buyer?

When first home buyers are saving, it's often all about the deposit.

When they've saved 5% or 10% of the purchase price, they're likely to then find that a number of other costs delay their home ownership dream for even longer.

What are these costs, and how much do you need to be prepared to save?

Let's assume you're buying your first home. We’ll take Sydney’s median price, at $650,000 as of 31 July, according to RP Data, although it’s unlikely all first home buyers will be considering a purchase at the median price.

With that being said, we’ll imagine that you have a 5% deposit - $32,500.

It's an established property, and not that far from where you currently rent. If you’re looking to buy new then under the current grant system in New South Wales you might be up for some benefits.


The loan process will cost you something like the following:

This means you'll be taking out a $617,500 loan and that you'll need lenders mortgage insurance (LMI) due to your low deposit. This varies from lender to lender, and if you’re not sure what LMI is, here are eight things you should know.

You can also read about LVRs here (loan to value ratio).

At the Commonwealth Bank, it's estimated at just under $27,500.  Some lenders do allow you to capitalise, that is, add this to the top of the loan amount. In this instance, you’ll be looking at around $210-$215 per monthly loan repayment extra, rather than needing to foot the bill upfront.

However, for the sake of this exercise, we'll assume you will pay the fee upfront to avoid paying further interest down the track.


You then have duty to pay on the loan amount. There is also around $25,000 in stamp duty (this varies by state).

The relevant Office of State Revenue can assist in working out this fee. In some states and territories there are significant stamp duty reductions for eligible first time buyers, particularly those buying new.


You will need to register your mortgage - usually a flat rate of about $100. And then you can throw in the establishment of loan fee and legal costs which, together, usually amount to around $1,000.


Looking at the buying process and ignoring 'hard to calculate' costs such as your own time, travel expenses and similar as you search (as well as any paid-for online searches that some will undertake), you can easily estimate up to another $1,500 in checks (such as building and pest inspections, which can typically be around $500) and legal expenses in the buying process as well.


After all is said and done, you then need to pay for your moving costs from where you currently live into your new home.

Assuming that our buyer in this situation is a renter in a smallish apartment, let's assume that cleaning costs may amount to $100 (for carpet steam cleaning) and then some moving costs. Service Central estimates up to $500 for a couple living in an apartment. If you're moving interstate or from long distances away, this could easily span into the thousands of dollars.



  • Buyer's agent fee
  • Connection fee for services (not common)
  • Contents insurance
  • The "unknown" factor. Perhaps you will have minor renovations or home improvements, such as painting, to make your place feel like home. You may even need to purchase new furniture or similar.

How much did it cost you to buy and move into your latest property? What other hidden costs have you noticed?