When looking at the cost of buying a house in Perth, you need to not only look at the sale price itself, but several other costs including; lender’s mortgage insurance, stamp duty, legal fees, plus more. In this blog, we explore these costs to ensure home buyers aren’t surprised with additional fees when it comes down to crunch time.
There are a few different costs associated with buying a property that you’ll need to factor into your budget. Some of these costs include:
Bank fees
Deposit
The first is the deposit, or down payment for your home loan, which is typically around 20% of the purchase price. So, if you’re looking at buying a $500,000 property, you’ll need to save up at least $100,000 for the deposit.
Lenders Mortgage Insurance
If you’re unable to come up with a 20% deposit, you may still be able to buy a property but you will likely have to pay for Lenders Mortgage Insurance (LMI). This insurance protects the lender in case you default on your loan and allows you to pay, for example, only a 5% deposit.
The cost of LMI can vary depending on the size of your loan and the deposit amount, but it’s typically around 0.20-0.95% of the loan value. So, on a $500,000 loan, LMI would cost between $1000 and $4750.
Home loan application fee
Most lenders will charge a home loan application fee, which is usually around $500, however this may vary depending on your bank. This fee covers the cost of processing your application and verifying your financial information.
Valuation fee
Your lender will also need to get the property valued before approving your loan. The valuation fee is typically around $300, but it may be free if you’re taking out a package loan with the same lender.
Government fees
Stamp duty
You’ll also need to pay stamp duty, which is a tax on property transactions. The amount of stamp duty you’ll need to pay will depend on the purchase price and your circumstances (e.g. whether you’re a first home buyer or investor).
Use our Stamp Duty Calculator to estimate your stamp duty in your state or territory.
Conveyancing fees
Conveyancing fees, also known as settlement fees, are charged by your conveyancer or solicitor for their professional services in relation to the purchase. These fees will vary depending on the complexity of the transaction and the location of the property, but you can typically expect to pay between $500 and $1500.
Registration of your mortgage
Once your loan has been approved, you’ll need to register your mortgage with the relevant state or territory government body. The registration fee is typically around $200.
Moving costs
Costs associated with moving, such as removalists, packing materials and temporary accommodation can also add up. It’s important to factor these costs into your budget when saving for a home.
Other costs
Legal fees
You’ll need to budget for legal fees, which will be charged by your conveyancer or solicitor for their services in relation to the purchase.
These fees will vary depending on the complexity of the transaction and the location of the property, but you can typically expect to pay between $800 and $2000.
Building and pest inspections
Before buying a property, it’s a good idea to get a Perth building and pest inspection done. This will help identify any structural damage or other issues and defects with the property. The cost of an inspection will vary depending on the size and location of the Perth property, but you can expect to pay between $200 and $600.
Ongoing costs of owning a home
You should also factor in the ongoing costs of owning a home, such as connecting gas and electricity, council rates, water bills, insurance, and repairs and maintenance.
Connecting gas and electricity
If your new home doesn’t have gas or electricity connected, you’ll need to pay for this as well. The cost will depend on the provider and the type of connection you need. There will also be the ongoing costs of gas and electricity usage.
Council rates
Council rates are another cost you’ll need to factor in when buying a home. These are set by your local council and go towards the upkeep of public amenities like parks, roads and libraries in your area.
Water bills
You’ll also need to pay for water usage at your new home. The cost of water will depend on the state you live in, the size of your property and how much water you use.
Home and content insurance
It’s also important to factor in the cost of insuring your new home and contents. Home insurance will protect your property against damage from events like storms, fire, theft and vandalism. Contents insurance will cover your belongings if they’re damaged, lost or stolen.
Repairs and maintenance
Owning a home also means being responsible for repairs and maintenance. From fixing a leaky tap to repainting the exterior of your home, these costs can quickly add up. It’s important to factor them into your budget when considering how much you can afford to spend on a property.
Buying a house with HKY Real Estate
When you purchase a house in Perth through one of our real estate agents, you can rest assured that we will guide you through the entire process. From finding a house that suits your needs, to making sure you are aware of costs and other factors involved with buying a house. To find out more, get in touch with our friendly team today.
Costs involved with buying a house FAQs
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