While most buyers budget for deposits and advertised prices, numerous additional costs can add 5-10% to your total purchase expense. Understanding these hidden costs prevents budget blowouts and settlement surprises.
Legal and Conveyancing Fees
Solicitors or conveyancers handle the legal aspects of property transfer, typically charging $800-$2,500 depending on complexity. This includes contract review, searches, settlement attendance, and document preparation. Shop around for quotes but prioritize experience over lowest price.
Building and Pest Inspections
Professional inspections cost $300-$800 but can save thousands by identifying problems before purchase. Pest inspections are separate and equally important, especially in areas prone to termite activity. Consider these essential protection, not optional extras.
Loan Application and Establishment Fees
Lenders charge application fees ($600-$1,000) and ongoing fees for loan features like offset accounts or redraw facilities. Some lenders waive establishment fees as competitive offers, but factor ongoing annual fees into your comparison.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20%, you’ll pay LMI protecting the lender against default. This can cost $2,000-$30,000 depending on loan amount and deposit size. LMI protects the lender, not you, but enables property purchase with smaller deposits.
Property Valuation Costs
Lenders require professional valuations costing $200-$600. If the valuation comes in below purchase price, you might need additional deposit or face loan rejection. Some lenders include valuation costs in loan packages.
Settlement and Bank Fees
Settlement agents or conveyancers charge fees for attending settlement and coordinating the transfer process. Banks also charge settlement fees and potentially documentation fees for loan establishment.
Property Insurance
Buildings insurance is mandatory from settlement and costs $500-$2,000 annually depending on property value, location, and coverage level. Arrange insurance before settlement as lenders require evidence of coverage.
Moving and Connection Costs
Professional movers cost $500-$3,000 depending on distance and amount of belongings. Add utility connections, internet setup, mail redirection, and time off work for settlement. These lifestyle costs add up quickly.
Immediate Maintenance and Setup
New properties might need blinds, gardens, or other finishing touches. Established properties often require immediate maintenance, cleaning, or updates. Budget $2,000-$10,000 for making the property liveable and comfortable.
Council Rates and Strata Fees
Quarterly council rates vary significantly by location and property value, typically $1,000-$4,000 annually. Apartments and townhouses have strata fees covering common area maintenance