Buying a home is an exciting milestone, but many first-time buyers are surprised to discover that the cost of the house itself isn’t the whole story. Beyond the sale price and the loan repayment, there’s a long list of expenses that sneak in along the way—some expected, some not so much.
Here’s a closer look at the hidden costs your home loan won’t cover, and why budgeting beyond your mortgage is a smart move.
Stamp Duty and Government Charges
One of the biggest upfront expenses that catches buyers off guard is stamp duty. This is a state government tax on property transactions, and it can run into tens of thousands depending on your purchase price and location. While some first-home buyers may qualify for concessions or exemptions, many don’t.
In addition to stamp duty, buyers also face other government-related fees such as land title transfer fees and mortgage registration charges. These don’t come with much fanfare, but they add up quickly.
Legal and Conveyancing Fees
Conveyancers and property lawyers handle the legal side of your purchase—from reviewing the contract of sale to lodging the required documents with the government. While their service is essential, it’s also something you need to pay for out of pocket.
Legal fees typically range from $1,000 to $2,500, depending on the complexity of the property transaction and your location. If any disputes or title issues arise, expect the bill to climb higher.
Building and Pest Inspections
Before committing to a property, most buyers opt to have building and pest inspections carried out. These help uncover issues that aren’t visible during an open home, like termite damage, rising damp, or structural problems.
While they’re optional, skipping them could cost you far more in the long run. Inspection reports usually cost a few hundred dollars each, but they can save you from buying a money pit.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the property’s value, you’ll likely be charged Lenders Mortgage Insurance. This protects the bank—not you—in case you default on your loan. It’s often rolled into the mortgage, but it still increases your loan amount and overall interest paid.
This cost isn’t always clear at the outset, which is why it’s important to factor it into your budget when working out how much you can afford.
Moving and Connection Costs
The cost of moving house isn’t just about hiring a truck. There are packing materials, utility disconnection and reconnection fees, redirection of mail, and sometimes temporary accommodation if your settlement dates don’t align.
Add in the cost of furniture if you’re upgrading from a smaller place or moving out of a rental, and it’s easy to see why many new homeowners find themselves short on cash in those first few months.
Strata and Ongoing Fees
If you’re buying a unit, townhouse, or apartment, you’ll likely be part of a strata scheme. This means regular levies to cover shared property expenses like building insurance, maintenance, and cleaning of communal areas.
Even for standalone homes, ongoing costs can sneak in. Council rates, home insurance, and general upkeep all add to the annual cost of ownership—none of which are covered by your mortgage.
Repairs, Renovations, and Unexpected Fixes
Even new or seemingly “move-in ready” homes can come with unexpected repair needs. A faulty hot water system, roof leak, or ageing air conditioner can pop up in the early weeks or months after moving in.
Then there are the little things you didn’t budget for—curtains, garden tools, a lawnmower, extra lighting. These might seem minor individually, but together they can become a considerable extra cost.
Why You Need a Buffer
When planning your finances, it’s not enough to cover the deposit and stamp duty. It’s a smart idea to build in a buffer of 5–10% of the purchase price to manage these hidden expenses without financial stress.
Having a clear picture of what you’ll need beyond your loan helps you make better decisions and reduces the risk of early financial strain. It can also influence your choice of property if your budget is tight.
Getting Professional Advice
Understanding the full cost of home ownership isn’t always straightforward. That’s why speaking with an experienced Sydney mortgage broker can be so valuable. A good broker will not only help you secure a competitive loan but also give you a breakdown of what costs to expect, including any government incentives you might qualify for.
It’s not about selling you something—it’s about helping you make informed decisions from day one.
The Bottom Line
Home ownership comes with more than just a mortgage. From inspections to insurance, strata fees to stamp duty, these hidden costs can significantly impact your budget. Knowing what’s ahead and planning for it can mean the difference between a smooth transition and a financial headache.
Take the time to understand the full financial picture, ask the right questions, and surround yourself with the right professionals. It might not be the most exciting part of buying a home, but it’s one of the most important.
