There are a lot of costs associated with buying a property. Fees and duties, taxes and insurances, and of course the cost of moving home, really start to add up. Here’s more information about all major costs to help you to work out your budget.
Loan application fee
Loan application fee is also called establishment fee, payable to your lender for processing your loan. This fee varies from lender to lender, but is generally under $750 and is usually waived off under certain circumstances.
Valuation fee
Your lender will arrange a valuation of the property to assess its value – it could range between $250 – $400 for valuation by an accredited valuer, though you should note that some properties attract higher fees. Valuation fee is also waived off under certain circumstances.
Lenders' mortgage insurance
As the term suggests, this fee is to protect the lender. In case you fail to pay your loan and the property has to be sold, but the money realised from it does not cover the loan, mortgage insurance covers the lender’s risk. Mortgage insurance is usually required if you are borrowing more than 80 per cent of the property value. It is a one-off fee and is calculated on a sliding scale, depending on the loan amount and ratio, and can be quite high in some cases.
Property Stamp Duty
This tax is payable to the Government on most property purchases. The amount varies from state to state, and also depends on the value of the property.
Mortgage Stamp Duty
This fee depends on the size of your loan and varies from state to state. There have been times when some state governments have waived off mortgage stamp duty for a limited time but it should be an expected expense.
Mortgage Registration Fee
This is a charge made by the Government to register your mortgage document.
GST
GST does not apply to all the properties, only to those built after 1 July 2000, and to new house and land packages. Some buying costs attract GST, such as conveyancing and solicitor’s fees, valuation fees and moving costs, but the tax will be included in their invoices. Please note – you won’t have to pay GST on a pre-owned property, and it doesn’t apply to your loan repayments, bank charges, residential rents or council and water rates.
Conveyancing
Solicitors and conveyancers provide a valuable service during the sale of a property. Fees for solicitors and conveyancers vary from state to state, and most of these professionals will decide on the fee after studying your documents. The fees should include checking the contract, carrying out searches, and generally making sure that the transaction goes smoothly.
Inspection reports
Inspection generally covers the building, structure and other matters that may need addressing before you move into the new property. Having your property inspected is an important element of the buying process. Costs will depend on the size and condition of the property, and ease of access to concealed areas.
Removalist
The cost of moving depends on many factors, including the number of goods, the distance you are moving, and ease of access of both the current and new premises. Like most cases, it is advisable to get three or four estimates, and don’t forget to ask about insurance – usually a percentage of the value of your goods – since breakages can be a possibility.
FAQs
Got questions? Find answers to some of the most commonly asked questions about our financial solutions, processes, and services to help you make informed decisions.
LMI is a third-party insurance premium payable by you as the borrower, to protect the lender against the potential loss of money if the borrower is unable to repay the home loan. Generally, an application with a Loan-to-Value Ratio (LVR) of 80% or more may result in the borrower having to pay Lender’s Mortgage Insurance.
Extra payment is an excellent feature of a good mortgage deal. Here, your lender lets you make lump-sum additional payments along with your regular monthly payment. Making extra payments allows you to shorten the length of time you are paying your mortgage. Since your balance is being paid off faster, you will also have fewer total payments to make, thus lowering your interest. At Reliiance Financial Solutions, we can help you find the most suitable mortgage deal for you. We have a range of lenders that allow you to make as many extra repayments as you want, whenever you want, without attracting any penalties.
Stamp Duty is a government tax imposed on contracts, with the amount usually calculated as a percentage of the contract value. In layman’s terms, it is the tax charged for your legal documents to be ‘stamped’.
If you are planning to buy a property, it’s crucial to factor your State’s Stamp Duty into your budget.Chances are, based on your circumstances and state of domicile, you might be able to obtain a stamp duty exemption, or concessions (discount) against the purchase of your first home. Stamp duty laws get changed often, so be sure to check your State Government’s website for the most up-to-date information.
Did you know that some lenders would allow you to cash out any extra repayment you made whenever you need the money? You read that right. This useful mortgage feature is called “redraw facility”. You can withdraw any extra repayments or lump sum payments you make over the life of the loan. At Reliiance Financial Solutions, we will explain all mortgage products to you, including those which allow you to the redraw option.
Testimonials
Discover how we’ve helped our clients navigate their financial journeys with personalized solutions. Read their stories of success and empowerment below.
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At Reliiance Financial Solutions, we have been privileged to have worked with hundreds of remarkable individuals and families.
Very few things come close to receiving their genuine appreciation of our services. All we can say in return is – the pleasure was all ours.
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