Eight expenses to budget for before you buy a home

Buying a home or investing in a property can involve more than just the purchase price and the deposit. Some additional upfront expenses can add up to 10 per cent of the property's total value, signficantly impacting your savings if you don't plan ahead. 

Some costs, such as stamp duty, are unavoidable. Don't take shortcuts with other expenses, such as using legal advice and undertaking a building inspection, as mistakes in these areas can cost you far more in the long run.

Here are the key costs to budget for:

1. Building and pest inspections

While not always legally mandatory, building and pest inspections ensure the structure is sound and free of termite damage. Expect to budget between $500 and $1,000 for comprehensive combined reports

2. Loan application and upfront bank fees

Lenders may charge application fees (sometimes exceeding $1,000), valuation fees, and rate-lock charges. Tip: Many lenders will waive or discount application fees if negotiated during the loan setup.

3. Lenders mortgage insurance (LMI)

If your deposit is under 20 per cent of the purchase price, most lenders require LMI to protect themselves against default. LMI can cost thousands of dollars, though it can often be capitalised into your total loan amount.

4. Conveyancing and legal fees

Engaging a qualified solicitor or conveyancer ensures contract terms, title searches, and property transfers are legally compliant. Budget approximately $1,000 to $2,500 depending on complexity. All state-based Offices of Fair Trading will offer advice on how and why you should engage a solicitor to help with a purchase.

5. Stamp duty

Stamp duty is typically the largest non-negotiable expense. Rates vary by state and property value, though first home buyers may qualify for exemptions or concessions.

6. Insurance

Most lenders require proof of building insurance cover effective from the contract signing or settlement date to protect the asset prior to moving in. 

If you buy a property through Ray White, you may be eligibile to receive 30 days complimentary interim home insurance as an exclusive pre-settlement gift through Ray White Concierge. They can also provide you with a quote for your ongoing insurance cover.

7. Moving and removalist expenses

Whether hiring professional removalists or renting a van, factor in moving-day logistics, packing supplies, and temporary storage fees if timelines overlap.

8. Utility connections and service set up

The expense of moving and connecting your home to services such as gas, electricity and the internet all come with a cost and require your attention. Obviously, each charge is dependent on your circumstances and the size and position of your property.