Buying your first home is one of life’s major milestones. It can be exciting and fulfilling—but it can also come with surprises, especially when it comes to costs. Many first-time buyers are so focused on saving for a deposit that they overlook the many additional expenses that come with property ownership.
Knowing what to expect financially can help you budget better and avoid unnecessary stress. This is where working with a buyers agent Melbourne locals trust can be extremely helpful. A buyers agent can walk you through the process and help you prepare for both the obvious and hidden costs of buying a home.
Here’s a breakdown of the lesser-known expenses every first-time homebuyer should keep in mind.
Stamp Duty
Stamp duty is one of the biggest extra costs associated with buying property. It’s a government tax based on the value of the property and varies depending on the state or territory.
In Victoria, first-home buyers may be eligible for stamp duty concessions, but you must meet certain criteria. Still, it can amount to tens of thousands of dollars, so it’s essential to calculate this early and include it in your budget.
Legal and Conveyancing Fees
You’ll need a solicitor or conveyancer to handle the legal paperwork of your purchase. This includes checking the contract of sale, handling land title transfers, and ensuring settlement goes smoothly.
Legal fees can range from $1,000 to $3,000 depending on the complexity of the transaction. While it might be tempting to go with the cheapest option, a good legal team can save you from costly issues later on.
Building and Pest Inspections
Getting a building and pest inspection before you buy is highly recommended. It gives you insight into any structural problems, water damage, or pest infestations that might not be obvious during an open home.
These reports can cost between $400 and $800, but they are a small price to pay to avoid buying a property that needs major repairs.
Loan Application and Lender Fees
Your mortgage isn’t free to set up. Most lenders charge application or establishment fees, which can range from $300 to $1,000. There may also be valuation fees, settlement fees, and even monthly account-keeping charges.
It’s a good idea to shop around and compare lenders, or ask a mortgage broker to find the most cost-effective option for your situation.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the property value, you’ll likely have to pay Lenders Mortgage Insurance. This protects the lender—not you—if you can’t repay the loan.
LMI can cost thousands, and it’s usually added to your loan amount, increasing your repayments. A buyers agent Melbourne based can help you understand how LMI affects your overall borrowing power and explore ways to avoid it, such as using a guarantor.
Council and Utility Rates
Once you own your home, you’re responsible for paying ongoing costs like council rates, water charges, and energy bills. Council rates vary depending on the location and value of your property, while utilities depend on your usage.
These costs are part of home ownership, so it’s smart to factor them into your long-term financial plan.
Home and Contents Insurance
You’ll need to insure your home from the moment you sign the contract of sale. Many lenders require proof of insurance before they’ll approve your loan.
Insurance costs vary depending on the location, size, and value of your home. Don’t forget to include contents insurance if you want protection for your belongings as well.
Moving Costs
Don’t overlook the costs of moving into your new home. Whether you’re hiring removalists or renting a truck, these expenses add up quickly.
Also consider the cost of connecting internet, gas, and electricity, as well as any cleaning or repairs needed before you move in.
Renovation and Furnishing
Your new home might need a little work before it feels like yours. From repainting walls to upgrading appliances, renovation and furnishing costs can come as a shock after you’ve already spent so much.
Make a list of what you’ll need and get quotes where possible. Even small updates can stretch your budget if you’re not prepared.
Strata Fees (for Apartments and Townhouses)
If you’re buying a property that’s part of a complex, you’ll need to pay strata or body corporate fees. These cover the maintenance of shared spaces like gardens, lifts, and swimming pools.
Strata fees can vary widely, so make sure you understand the annual cost before making an offer. A good buyers agent can request a strata report to check the financial health of the building and identify any upcoming levies.
Buying your first home is a rewarding journey, but it’s one that comes with many financial responsibilities beyond the initial deposit. By understanding the hidden costs, you can plan more accurately, avoid nasty surprises, and make smarter choices.
Knowledge is power—and in property, it can also mean savings. Plan wisely, ask questions, and take the time to understand every aspect of the homebuying journey.
