Hidden Costs of Buying a Home (And How to Budget for Them)

Buying a home is a major financial milestone, especially for first-time buyers in Bathurst and Lithgow.

While most people focus on saving for the deposit, many forget to plan for the hidden costs that come with purchasing a property. These additional expenses can add up quickly and affect your overall budget and borrowing capacity.

As an experienced mortgage broker in Bathurst and mortgage broker in Lithgow, we help clients understand the full picture so they can confidently budget for a successful home purchase. Here’s what you need to know.

1. Stamp Duty

Stamp duty (or transfer duty) is one of the largest upfront costs associated with buying a home. The amount you’ll pay depends on the property value and your eligibility for concessions, such as:

First Home Buyer Assistance Scheme
Stamp duty exemptions for properties under a certain threshold

Tip: Use the NSW Revenue Calculator to estimate your stamp duty and ask your broker if you qualify for exemptions.

2. Lenders' Mortgage Insurance (LMI)

If you’re borrowing more than 80% of the property value, most lenders will require LMI. This protects the lender—not you—if you default on the loan. LMI can cost thousands of dollars, depending on the size of your loan.

Tip: Ask your broker if you’re eligible for schemes like the First Home Guarantee, which allows you to buy with as little as 5% deposit without paying LMI.

3. Loan Application & Bank Fees

These may include:

Application or establishment fees (typically $200–$700)
Valuation fees (often covered by lenders but can be $200–$600)
Settlement fees or discharge fees (especially when refinancing or switching lenders)

Tip: A mortgage broker can help you compare loans and negotiate with lenders who waive or reduce these fees.

4. Conveyancing & Legal Fees

You’ll need a solicitor or conveyancer to handle the legal side of the property transfer. Fees typically range between $2,000 and $3,500, depending on the complexity of the transaction.

Tip: Choose a licensed professional familiar with the NSW property market for a smooth process.

5. Building & Pest Inspections

Before you commit to a purchase, it's vital to conduct building and pest inspections, especially for older properties. These can cost $400–$800, but they could save you from buying a home with structural issues or pest damage.

Tip: Don’t skip this step—it’s a small cost compared to potential future repairs.

6. Home Insurance

Your lender will usually require that you have building insurance in place before settlement. The cost will vary depending on the property’s value, location, and risk factors like bushfire zones or flooding.

Tip: Get a quote early so you can include it in your budget.

7. Moving Costs & Utilities

Once you’ve secured your home, don’t forget about the expenses involved in moving in:

Removalist fees
Cleaning and repairs
Connection fees for electricity, internet, and water
New furniture or appliances

Tip: Set aside at least $1,000–$2,000 for post-settlement expenses.

8. Council Rates & Strata Fees

If you’re buying a standalone home, you’ll need to pay council rates, usually quarterly. For apartments or townhouses, strata fees are also required to maintain shared areas. These costs vary by region and property type.

Tip: Ask the seller or real estate agent for a breakdown of expected ongoing costs.

9. Ongoing Loan Costs

Some loans come with annual package fees (typically $300–$400/year), which may include discounts on interest rates, credit cards, or offset accounts.

Tip: Understand the long-term benefits of these packages and whether the savings outweigh the cost.

How to Budget for Hidden Costs

Step 1: Speak to a Mortgage Broker

A mortgage broker in Bathurst or mortgage broker in Lithgow can help you calculate all associated costs upfront and avoid surprises.

Step 2: Create a Buffer

Add 5–10% of your purchase price to your budget to cover hidden expenses.

Step 3: Use a Budgeting Template

Break down costs into:

Upfront costs (stamp duty, legal, inspections)
Loan-related fees
Post-settlement expenses (moving, setup)
Ongoing ownership costs (rates, insurance)

Hidden Costs of Buying a Home - Final Thoughts

Buying a home is exciting, but it’s essential to budget beyond the deposit. By planning for the hidden costs of buying a home, you can avoid unexpected financial stress and move into your new home with confidence.

At Sparks Finance, we’re committed to helping you understand the full picture. We’ll guide you through the entire process, from budgeting to securing the best loan for your needs.