Are you in the market for a cosy one-bedroom apartment in a revamped area of the inner city? Or perhaps you’re thinking of a four-bedroom house in a quiet suburb instead.
No matter what type of property you’re after, there are important costs outside of the deposit and home loan you should be aware of. Factor these in when you start saving so you’re not hit with any surprises later on.
Taxes and government fees
Stamp duty is likely to be your biggest cost outside of the deposit and mortgage. It’s a state government tax based on the purchase price of your property and typically needs to be paid within 30 days of settlement.
You may be able to increase your home loan to cover this cost, though conditions apply. And if you’re a first home buyer you may be exempt from stamp duty or entitled to a rebate or concession such as the First Home Owner Grant.
You’ll also need to pay a fee for the registration of your property’s title to the Land Titles Office in your state or territory. And if you’re buying a brand new home, GST may apply to the inspection and valuation of the property.
Building and pest inspections should be done before you exchange contracts. You want to be sure that the property is structurally sound and isn’t housing termites or any other pests. Even new properties can have a problem that only a professional will be able to uncover.
If you need to borrow more than 80% of the value of the property (60% for Low Doc loans) – what’s known as the loan to valuation ratio – you’re likely to be charged an amount to cover the lender’s risk.
This is known as Lenders’ Mortgage Insurance, or Low Deposit Premium, and both protect the lender.
As a home owner you may need some other forms of home insurance to protect your home and contents against fire, flood, theft and more.
A solicitor or conveyancer can provide you with a quote which will include the transfer of title, property and title searches and contract reviews.
Once the deal is done and the keys are yours, there’ll be some costs involved either to move in or set the property up for new tenants. If it’s the former, you may need to get removalists to help you.
Make sure to also budget for the connection of utilities such as electricity, water, gas and internet. There will also be council rates and potentially strata fees and taxes to cover.
Home loan costs
Paying off your home loan doesn’t just involve making weekly, fortnightly or monthly repayments – there will also be rates and fees to cover that come with the loan. You can make an appointment to meet with one of our lending specialists to ask any questions you have about a CommBank home loan.