The real costs of buying a home

Information to help you understand what you’re up for when buy a home

So, you want to buy a home...

But what does it really cost? Read on… we have included the costs you need to know when you’re considering buying a home PLUS ongoing costs that you will need to factor in before you actually buy.

Please note, the below figures will differ slightly dependent on a number of things like the value of the property; where the property you want to buy is located; which bank/lender you use; which solicitor and  building & pest inspector you use and so on.

For this example we will use a property value of $500,000 as a benchmark and we have explained some key terms at the bottom for you.

The numbers

Property Value: $500,000
Deposit:$100,000 (80% LVR)
Conveyancing/Legal fees:approx. $1800*
Stamp duty:$0 for first home buyers, $15,925 for non-first home buyers
Building and pest inspection (combined):$600*
Mortgage registration fee:$187*
Loan application fee:Up to $600*
LMI (Lenders Mortgage Insurance): $0 if you have a 20% deposit (i.e. your LVR is 80%), BUT up to $11,791 (for an LVR of 90%)*
Home Insurance:Up to $2,000 p.a. **
Total Required:$105,187

What are the ongoing costs?

The ongoing costs that you need to factor in to your budget (before you buy) your first home are: 

  • Mortgage Repayments
  • Building Insurance **(When initial contracts are executed, then monthly or annually)
  • Home & Contents Insurance
  • Moving costs


After the first month of home ownership, other costs include:

  • Council Rates/Water/Waste (Quarterly)
  • Pest treatments (termites etc) dependent on home type and location – 1 to 3 years)
  • Utilities – Electricity, Gas, Phone, Internet (Monthly)
  • Repairs & maintenance/upkeep

A second example

Here’s the above example in a table for a home valued at $500,000 PLUS a second example with a different LVR ratio.

80% LVR = $100,000 deposit
90% LVR = $50,000 deposit

Property Value$500,000$500,000
Your LVR (Loan To Value ratio)80%90%
Deposit required$100,000$50,000
Conveyancing/Legal Fees$1,800$1,800
Building & Pest Inspection$600$600
Mortgage Registration Fee$187$187
Loan Application Fee$600$600
LMI (Lenders Mortgage Insurance)$0$11,791
Home Insurance (12-months) - see below special note**$2,000$2,000
Total cash in the bank required for the purchase$105,187$66,978

price is what you pay, value is what you get...

Now some explanations from the above examples

What is LVR?

The Loan to Value ratio (LVR) is the amount of your loan compared to the value of your property. LVR is calculated by dividing the amount of the loan by the value of the property. For example, if the property is worth $500,000 and you have a deposit of $100,000, the LVR will be 80%.

What is LMI?

Lenders Mortgage Insurance (LMI) is insurance for the bank/lender, and not you! It’s the insurance that they take out but you pay for, in case you default on your home loan.

LMI is a fee charged by home loan lenders and required by the lender if you borrow more than 80% of the property purchase price. It protects the lender in the event that you default and are unable to meet your loan repayment obligations. LMI can be paid in full at settlement, however most lenders will add it to the total loan amount so it can be paid off on top of the your monthly loan repayment. In the latter case, if the LMI is included in your loan repayments, you’ll find that the purchase price will be under the $500,000 when everything is calculated.

LMI is calculated as a percentage of the amount borrowed. The fee the borrower pays increases as the LVR and loan amount increases. This fee varies slightly from lender to lender and depends on a number of variables including if the property is a new purchase or investment, if the property will be owner occupied, and where the property is located since stamp duty is payable on LMI.

Most of the figures have an asterisk * next to them, why?

This is because the figures we are quoting are estimate figures (what we have seen in transactions with past clients) and all depend on your particular circumstances and will vary.

Lenders charge different loan application fees & LMI insurance. Conveyancers/solicitors are the same, as do insurance companies and building and pest inspectors.

A special mention about Home Insurance ** 

In QLD by law, the buyer is responsible for the property from 5pm the next business day after the contract date — this is before settlement day.

When you sign a contract to purchase a property you will most probably sign a 30-day settlement contract, with conditions of (at minimum) a 7 day building and pest clause plus a 14 or 21 day finance clause. During this entire time until the settlement is executed, you the buyer are responsible for the insurance of the property.

You must decide for yourself whether to take out home insurance. However, not having home insurance is very risky. Home insurance will cover you for loss or damages to the building and its fixtures. You should also consider taking out contents insurance.

If you buy into a community titles scheme (E.g. a unit or apartment), you still need to insure your own property and contents. The body corporate will usually have to take out insurance for any common property.

The best solution is to contact your preferred insurance broker or company and ask for a 30-day covernote, and have the policy paid up by the settlement date.

And finally, what do we do?

We’re not real estate agents, we don’t have stock lists or sell property. And we’re not solicitors, mortgage or insurance brokers hence we don’t arrange your conveyancing, finances or insurance. We’re Buyers Agents, we source and buy property…for first home buyers, downsizers, investors, developers… just like you.

If you are in need of a good reputable mortgage broker, solicitor, insurance broker, building & pest inspector etc, we know many that are excellent and who will only look after your interests.

Whilst you’re planning to buy your first home, your mortgage broker is your best friend, and when you are pre-approved with your home loan and ready to pull the trigger to buy your first home…is when you talk to us.

In the above example of a $500,000 budget for your first home, how much of a saving would it be for you if we could secure you that same home for $490,000 or $480,000 or more? That’s what we do.

Another scenario… If you’re looking in an area and there are 30 homes that you like, do you have the time to inspect each and every one of them in detail? We do.

The benefits of using a buyers agent like us is we will look at your needs, wants and goals objectively and find you a property that fits your criteria so you can make a well informed right decision that makes you happy and successful in your first home purchase. So if you’re ready to go but don’t know where to start give us a call for a free consultation to see what we can do for you.

To see how we can help you find that perfect first home, get in touch with us on 1300 928 555 or send us a message below.