Buying a property is exciting, whether it’s your first home, your next move, or an investment property. But one of the biggest surprises for many buyers is discovering that the purchase price is only part of the overall cost.
There are several upfront expenses involved in buying a house, and understanding them early can help you avoid stress, protect your savings, and feel more confident throughout the process.
At Bendigo Mortgage Brokers, we regularly help clients understand the full picture before they start house hunting so they can budget properly and move forward with confidence.
Your Deposit
The deposit is usually the biggest upfront cost when buying a property.
Many buyers aim for a 20% deposit because this can help avoid paying Lenders Mortgage Insurance (LMI). However, depending on your circumstances, some lenders may accept smaller deposits.
For example:
- A 20% deposit on a $600,000 property is $120,000
- A 10% deposit would be $60,000
- A 5% deposit would be $30,000
Some first-home buyers are surprised to learn they may still be able to enter the market with a smaller deposit, especially if they qualify for government support schemes or guarantor options.
Working with Bendigo Mortgage Brokers can help you understand what deposit options may suit your situation.
Stamp Duty
Stamp duty is one of the largest additional costs involved in buying a property in Victoria.
The amount payable depends on:
- The property value
- Whether you’re a first-home buyer
- Whether the property will be owner occupied or an investment
- Any concessions or exemptions you may qualify for
For some buyers, stamp duty can add tens of thousands of dollars to the purchase cost.
Many first-home buyers in Victoria may qualify for reduced stamp duty or exemptions depending on the property price, which can make a significant difference to upfront costs.
Because stamp duty varies from purchase to purchase, it’s important to factor this into your planning early rather than focusing only on the property price itself.
Mortgage Registration and Transfer Fees
There are also government and administrative fees involved in transferring ownership and registering the mortgage.
These are usually smaller than stamp duty but still form part of the total buying costs.
Your conveyancer or lender will generally include these costs in your settlement figures so you know what to expect before settlement day.
Loan Application and Bank Fees
Different lenders charge different fees when setting up a home loan.
These may include:
- Application fees
- Settlement fees
- Valuation fees
- Ongoing account keeping fees
Some lenders offer package loans that reduce or waive certain fees, while others may include annual charges in exchange for discounted interest rates or extra features.
It’s important to compare the total cost of the loan rather than focusing only on the interest rate.
Conveyancing and Legal Fees
A conveyancer or solicitor helps manage the legal side of the property purchase.
They assist with:
- Reviewing contracts
- Managing settlement
- Conducting property searches
- Handling legal documentation
- Transferring ownership
Conveyancing fees can vary depending on the complexity of the transaction, but buyers should always allow room in their budget for these services.
Having the right legal support can help identify issues before settlement and reduce the risk of unexpected complications.
Building and Pest Inspections
Before purchasing a property, many buyers arrange building and pest inspections, but it is optional.
These reports can uncover:
- Structural issues
- Water damage
- Pest problems
- Safety concerns
- Potential repair costs
While inspections are an extra upfront expense, they can potentially save buyers thousands of dollars in future repairs.
Skipping inspections to save money can sometimes become far more expensive later.
Moving Costs
Moving expenses are often underestimated when budgeting for a property purchase.
Depending on your situation, costs may include:
- Removalists
- Truck hire
- Storage
- Cleaning services
- Utility connection fees
- New furniture or appliances
Even smaller expenses can add up quickly during a move, particularly for families or buyers relocating from another area.
Why Preparation Matters
One of the most common mistakes buyers make is using all their savings for the deposit without allowing enough buffer for the additional costs involved.
Having a clear understanding of the full buying process can help you:
- Avoid financial stress
- Budget more confidently
- Understand your borrowing position
- Prepare for settlement properly
- Feel more in control throughout the journey
Whether you’re buying your first home or your next investment property, preparation can make the entire experience smoother and far less overwhelming.
If you’re unsure what your total buying costs could look like, speaking with a broker before you start property hunting can help you understand your options and create a realistic budget.
At Bendigo Mortgage Brokers, we help clients understand the real costs involved so they can move forward with confidence and clarity from day one.
FAQs
What is the biggest upfront cost when buying a house?
For most buyers, the largest upfront costs are the deposit and stamp duty. The exact amount depends on the property price and your individual circumstances.
Can I buy a house without a 20% deposit?
Yes. Some lenders accept smaller deposits, although Lenders Mortgage Insurance may apply. Certain government schemes and guarantor loans may also help eligible buyers enter the market sooner.
What costs do first-home buyers often forget?
Many first-home buyers underestimate costs like conveyancing, inspections, moving expenses, and bank fees. These additional expenses can add up quickly if they are not planned for early.
Should I speak to a broker before looking at properties?
Yes. Understanding your borrowing power and total buying costs before house hunting can help you set realistic expectations and avoid surprises later in the process.
