The extra costs of buying a home

When most people think about buying a home they usually first think about a loan to cover the purchase price and then the amount of money they’ll need for a deposit.

There are plenty of other extras, often forgotten about, that also need to be considered when buying. And of course these also need to be factored in when putting your savings together. Otherwise you could find yourself caught short and not be able to afford the home you’ve got your heart set on. Here’s a rundown on some of those extra costs to keep in mind.


Toy house, calculator and pen and notepad

Inspection reports

 Often overlooked by buyers, building and pest inspection reports are very important. A building inspection details the list of any structural defects and repairs required, while a pest inspection checks for any signs of past or present damage due to pest infection.

Valuation fee

Before purchasing, you may be required to get a formal valuation of the property. Licenced valuers who base their assessments on hard evidence to assess the security value of the property will carry this out. A free valuation of the property is sometimes included in the home loan establishment fee by your home loan provider.

Loan establishment fee

At RACQ Bank a fee is charged to establish a home loan. An establishment fee is charged to cover costs involved in processing the application and fulfilling the loan through to funding. This includes credit checks, property appraisals and administrative costs.

Make sure you research each banks’ fees before submitting an application.

Stamp duty

This is the tax levied on the purchase of a new property, and is likely to be the single biggest additional cost you’ll need to pay.

Registration/transfer fee

This is a state government fee for registering the loan, and allows future buyers to search and see if there are any claims on it.

Service fees

A solicitor or conveyancer is usually engaged by both the buyer and the seller to manage the process of transferring the property and ensuring contract obligations are fulfilled. Solicitors will also perform other searches and checks as well as providing advice to sellers and buyers throughout the process – these services may also result in additional charges. If you are selling a property as well as buying, you should also take into account the real estate agent’s fee, which is usually a commission based on a percentage of the value of the property being sold.


If you need to borrow more than 80% of the cost of your home, you’ll need to factor in Lenders Mortgage Insurance (LMI). And don’t forget about mortgage protection insurance, which will cover you if you find yourself suddenly unable to work. Then of course there’s contents insurance, which protects the fixtures and contents of your property, and also home insurance, which provides comprehensive cover for the building itself. Home insurance is usually a requirement of your loan contract – ie. lenders generally require that you maintain insurance on the property.

Settling in costs 

Once you’ve bought your new home, there are still more costs that may need to be considered such as new furniture, new flooring or plumbing, removalist and packaging, end of lease clean from a rental, and electricity, phone and internet connections.

So as you can see from the list above, the costs of buying a home don’t end with the purchase price and the deposit. Not that this should put you off from buying of course, but it’s always good to know what you’re in for, so you can plan and save the right amount of money. 


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The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person’s particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs. You should obtain and consider the Product Disclosure Statement or terms and conditions relating to the products mentioned, before deciding whether to acquire any products.

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The information provided is intended as general information only and may not be appropriate for you. This information does not take your personal objectives, circumstances or needs into account and you should obtain financial and legal advice before making any decisions. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, before deciding. 

RACQ Bank loans and banking products are issued by Members Banking Group Limited ABN 83 087 651 054 AFSL and Australian credit licence 241195 trading as RACQ Bank.
Except for Members Banking Group Limited ABN 83 087 651 054 AFSL and Australian Credit Licence 241195, trading as RACQ Bank (RACQ Bank), any RACQ entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity’s obligations do not represent deposits or other liabilities of RACQ Bank. RACQ Bank does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.