Hidden Costs of Buying a Home in Australia: What First-Time Buyers Should Know

Hidden Costs of Buying a Home in Australia: What First-Time Buyers Should Know

You’ve finally decided: it’s time to buy your first home. Maybe you’re tired of rent hikes. Maybe you’re craving a backyard and a barbecue setup. Maybe you’re just done with share house dish dramas. Whatever your reason, buying a home in Australia is a huge milestone and you deserve to feel excited about it.

But here’s the catch. That picture-perfect property price on the listing? It’s kind of like the base price for a car — drive-away costs are extra. A lot extra.

It’s surprisingly easy for first-home buyers to underestimate the true cost of buying a property. And the last thing you want is to get halfway through the process only to discover an unexpected bill you hadn’t budgeted for.

So let’s break down all those hidden (or simply less obvious) costs, and help you avoid any stressful surprises along the way.

Stamp Duty — The First Big Shock

Let’s get the biggest wallet punch out of the way first.

Stamp duty (or transfer duty) is a tax charged by state and territory governments. It can cost tens of thousands of dollars, depending on:

• The property’s value
• Where it is
• Whether you’re a first-home buyer

If you’ve heard someone say “We spent our deposit + stamp duty +… everything!”, this is why.

The good news?
If you’re a first-home buyer, you may qualify for concessions or even full exemptions in some states. For example, in NSW, eligible buyers pay zero stamp duty up to certain purchase thresholds.

Hot tip:
Before falling in love with a property, check whether you qualify for concessions. It could be the difference between “This is doable!” and “Maybe next year…”

Lenders Mortgage Insurance — The Cost of a Small Deposit

If you’re saving with both hands but house prices keep running away from you, you’re not alone.

Many first-home buyers enter the market with less than a 20% deposit. But when you do, Lenders Mortgage Insurance (LMI) kicks in. It protects the lender, not you — and it’s not cheap.

You might pay:

• A few thousand dollars on lower-value properties, or
• $20,000+ on higher-value ones

The worst part? Many buyers don’t even know it exists until the broker or bank brings it up.

How to avoid it:

• Save a 20% deposit (easier said than done, we know!),
• Have a guarantor, or
• Use the First Home Guarantee to buy with as little as 2–5% and no LMI

This is where having a good mortgage broker is gold, someone who knows every loophole and scheme available.

Conveyancing & Legal Fees — The Fine Print Matters

Buying a home involves contracts the size of a Harry Potter novel. And unless you’re secretly a property lawyer, you’ll want someone qualified reviewing them.

A conveyancer handles:

• Contract checks
• Title searches
• Settlement coordination

Expect to pay $1,200–$3,000.

Yes, it’s another upfront cost, but mistakes here can cost far more later.

Building & Pest Inspections — The Reality Check

Ever walked into an inspection and instantly imagined your furniture in the living room? It’s easy to fall in love with a home, while ignoring cracks in the wall that are just shadows, right?

A proper inspection checks for:

• Structural issues
• Termites
• Dampness
• Hidden defects

Cost: $400–$1,400 combined.

Because if the house is hiding a secret, you want to know before signing, not after the ceiling leaks on your first night.

Property Valuation Fees — The Bank Wants Proof Too

Lenders love to double-check your property isn’t overpriced. Many waive this fee, but not all.

Typical cost: $300–$800

Not the worst cost… but still something to plan for.

Loan Fees — Banks Love a Fee

Depending on your lender and loan type, you may encounter:

• Application fees
• Settlement fees
• Rate lock fees
• Monthly or annual loan charges

You could be looking at $400–$1,500 just in bank admin.

RateSeeker knows which lenders are fee-happy and which ones give you a fairer deal.

Insurance — Welcome to Homeownership

Once the contract is signed, the property is your responsibility. Even if the settlement is weeks away.

You may need:

• Home building insurance (often mandatory before settlement)
• Contents insurance
• Optional: Income/mortgage protection insurance

Tip: Bundle policies to save. Every dollar counts when you’ve just bought a house!

Moving Costs — The Forgotten Expense

Between cleaning your old place and paying removalists, moving is rarely cheap.

Possible costs:

• Removal truck: $500–$5,000
• Packing materials, cleaners, reconnections, pizza for friends helping out…

Okay, the pizza is technically optional, but highly recommended.

Strata Fees — If You Love Apartment Living

Owning a unit or townhouse? You’ll likely join a strata scheme.

That means regular contributions toward:

• Building repairs
• Facilities (pools, lifts, gyms)
• Shared space upkeep

Quarterly fees range from $500 to over $2,000 depending on the building.

And keep an eye out for special levies, they can pop up suddenly.

Council & Water Rates — Welcome to Adulting

Once you’re a homeowner, guess who helps fund streetlights, parks, and rubbish removal?

You do.

Expect:

• Council rates: Varies by state: $750–$4,000 per year
• Water services: $600–$1,000 per year

Every state and council differs so add this into your long-term budget.

Repairs, Renovations & Furnishings — Pinterest Dreams Aren’t Free

Many first-home buyers swipe up on a property thinking: “We’ll just paint and update a bit later” Then reality hits.

What you may need:

• New appliances
• Curtains or blinds (trust us — they’re shockingly expensive)
• Light fixtures, door locks, garden tools, and more

Even the basics add up fast.
It’s smart to keep a little buffer for the “we didn’t think about that” costs.

Maintenance & Emergency Fund — Because Life Happens

A washing machine flood or a roof leak isn’t something you can simply ignore until payday.

A rule of thumb:
Set aside 1–3% of the property value per year for maintenance.

On a $700,000 home, that’s $7,000–$21,000 annually (but spread over time).

Having a backup fund = far less stress.

How Much Extra Should You Budget?

A safe estimate:
Add 5–7% on top of the property purchase price

So for a $750,000 home:
$37,500–$52,500 in additional costs

Not small change, but manageable with proper planning.

The Good News: You Don’t Have to Navigate This Alone

Buying a first home is equal parts exciting and overwhelming. But when you’ve got experts guiding you, the process becomes a whole lot smoother.

At RateSeeker, we help first-home buyers:

• Understand every upfront and ongoing cost
• Maximise concessions and grants
• Avoid unnecessary fees like LMI where possible
• Secure better loan rates and approval odds
• Enter the market with confidence, not confusion

You deserve a home-buying journey that feels empowering — not stressful.

Ready to Buy Without the Hidden Surprises?

If you’re thinking about stepping into the market, let’s make sure you know the full picture.

Whether you’re just curious about your borrowing power, trying to avoid surprise costs, or actively preparing to purchase your first place, we’re here to help. Talk to a RateSeeker mortgage expert today and take the first step towards owning your future home.