Upfront costs of buying a home

Uncovering Hidden Expenses: A Guide to Understanding the Costs of Buying a Home


The process of buying a home can be exciting, but it’s important to be aware of all the expenses that come with it.

Beyond the purchase price, there are many hidden costs that can add up quickly.

Here’s a breakdown of some of the fees and expenses you might encounter along the journey of buying your dream home.


When purchasing a home, stamp duty is likely to be one of the most significant expenses.

Stamp duty is a tax imposed by state and territory governments on property purchases.

It could vary based on the location of the property and factors such as the purchase price and the buyer’s status as a first-time homebuyer or investor.

The amount of stamp duty you pay will vary depending on the location of the property and the price of the property.

How much is stamp duty cost to you when you buy a house?

The amount of stamp duty you will have to pay on a property can vary depending on the  state or territory in which the property is located, as well as the type and value of the property.

Generally, the fee ranges from 3-4% of the property’s value.

Different states and territories may offer stamp duty concessions for certain properties or buyers. For example, those constructing a new primary residence or first-time home buyers.

Your state or territory’s revenue office website can provide information on any available concessions.


Lender’s Mortgage Insurance is a type of insurance that protects the lender in the event that the borrower is unable to repay their mortgage.

LMI is typically required when the borrower has less than a 20% deposit for the property they are purchasing.

The borrower pays for the LMI premium, which is usually a one-off payment at the time of settlement. The premium is based on the loan amount and the level of deposit and can be quite expensive.

LMI allows borrowers with smaller deposits to obtain a mortgage, as it reduces the lender’s risk.

LMI Example:

A borrower with a $40,000 deposit (13.3%) for a $300,000 property may require paying a one-time Lender’s Mortgage Insurance (LMI) premium of $6,500, increasing the total loan cost to $266,500.

Can I avoid paying LMI expense when I am buying a property?

LMI fees can be avoided based on specific conditions. For instance, some professional home loans may not require the fee for certain professions such as doctors, engineers and accountants.

Some government schemes such as the First Home Guarantee may also waive the fee for first-time home buyers with a low deposit of 5%.

Some lenders may also waive the fee for borrowers with a 15% deposit of the property value.

It’s important to compare all possible options.

At VIRTUS, we can help you find the home loan which is right fit for you.

Want to find out how we can assist you to buying your first property?


When buying a property, conveyancers and solicitors handle all of the legal requirements such as examining the sale agreement, conducting title investigations, and preparing paperwork requested by the lender for the closing of the transaction.

The costs associated with hiring a conveyancer or solicitor when buying a property in Australia will vary depending on the specific services provided and the location of the property.

These can include charges for drafting and reviewing contracts, searching and providing advice on title and other legal issues if any.


When buying a house, there are several types of property inspections that may be recommended or required, each with its own associated cost.

The 3 main inspections are Building, Pest and Strata inspections.

Building and pest inspection:

This inspection assesses the condition of the property, including the structure, roof, walls, floors, and any visible signs of pests or termites.

This could cost you anywhere from $300 to $600 depending on the property.

Strata inspection report (for apartments or townhouses):

This report provides information about the condition and management of the strata scheme, such as the condition of common property, insurance, and any outstanding repairs.

The inspection could range from $200 to $500(varies).

There could be other inspections too such as Electrical, Plumbing and Pool.

Click here to know more about all inspections.


Application fee:

Lender may charge a fee to cover the cost of processing the loan application. It can vary but typically ranges from $0 to $600.

Most lenders don’t charge this fee but could vary from lender to lender. 

Establishment fee:

Lender may charge a fee to cover the cost of setting up the loan, such as underwriting, preparing loan documents and processing the loan application. It can vary but usually ranging from $200 to $1000.

Valuation fee:

Lender may charge a fee to cover the cost of an independent property valuation.

This makes it easier for the lender to decide how much money to give you and if you have enough for the down payment. It can vary but typically ranges from $200 to $500.

There could be other fees as well such as Credit Report fee, Title search and title insurance fee and Mortgage registration fee.

Click here to know about all these fees in more detail.


When you buy a house that needs repairs or you want to change how it looks to increase its value, it’s important to have an estimate how much it could cost you.

The renovations could be:

Cosmetic Work: 

Small changes include painting, replacing small things and fixing small holes in the walls.

Minor Work:

Regular changes include things like changing the kitchen, floors, changing wall structure around and installing an air conditioner.

Major Work:

Big changes include things that change the way the house looks and the structure of the house. The cost can vary a lot depending on the type of change.


You might want to get Home and Content Insurance, or it could also be part of your home loan agreement (mostly home insurance).

This expense could vary depending on size, location, type of property.

Content insurance is not always necessary, but it is an option. This type of insurance covers the cost of your belongings in case they are damaged or stolen due to unexpected events like natural disasters or theft.


When you buy an apartment or unit, you will be responsible for paying ongoing costs known as strata fees.

These fees cover the maintenance and management of the building and shared areas.

The specific cost will vary depending on the location and type of building in which your property is located.