When you’re getting ready to buy property, it’s easy to think the hard part is saving the deposit. And don’t get us wrong, that’s a massive achievement. But here’s what a lot of first home buyers and investors don’t realise until they’re deep in the process: the deposit is just one piece of a much bigger financial puzzle.
There are several other costs that come with buying property, and they can add up quickly if you’re not prepared for them. Some happen before settlement, some at settlement, and others keep going long after you’ve got the keys in your hand.
Understanding these costs early means you won’t get caught off guard, you’ll know exactly what you can afford, and you’ll be able to structure your finances properly from the start. So let’s walk through what else you need to budget for.
Stamp Duty: The One That Catches People Out
Stamp duty is usually the biggest cost outside of your deposit, and it’s one that surprises a lot of buyers because it can’t just be rolled into your loan (in most cases). This is a state government charge that applies when you buy property, and how much you pay depends on a few things: the purchase price, which state you’re buying in, whether you’re a first home buyer, and whether the property is for you to live in or to invest in.
To give you an idea of the numbers, if you’re buying an $800,000 house in NSW as an investor or non-first home buyer, you’re looking at around $31,000 in stamp duty. That’s a significant chunk of cash that needs to be ready to go.
If you’re a first home buyer, there’s good news. Depending on the property price and your state, you might be eligible for full exemptions, partial concessions, or grants that can reduce or even eliminate your stamp duty bill. But these benefits usually come with conditions, like price caps or requirements that you live in the property.
For investors, it’s a different story. You’ll generally pay the full amount with no discounts. And because stamp duty is paid upfront (or very close to settlement), you need to make sure you’ve got the cash ready to cover it. It’s not something you can defer or ignore.
Legal and Conveyancing Fees
You’ll need someone to handle the legal side of your purchase, whether that’s a conveyancer or a solicitor. They’ll review your contract, coordinate with your lender, manage the settlement process, and make sure everything goes smoothly on the day.
Conveyancers typically charge somewhere between $1,200 and $2,500, while solicitors can be higher depending on the complexity of the transaction. It might be tempting to go with the cheapest option, but this isn’t the place to cut corners. A good conveyancer can save you from costly mistakes and will often spot issues in contracts that you’d never notice yourself.
Building and Pest Inspections
Before you go unconditional on a property, it’s worth getting building and pest inspections done. These reports tell you if there are any structural issues, pest damage, or safety concerns that could cost you down the track.
A building inspection usually runs between $400 and $700, while a pest inspection is around $250 to $400. You can often get a combined report for a bit less. Even if you’re buying an apartment, inspections are still a smart move. You’d be surprised how many issues can be hiding behind fresh paint.
Loan Setup and Bank Fees
Depending on which lender you go with and what loan product you choose, there might be a few fees involved. These can include application fees, settlement fees, valuation fees, or ongoing package fees if you’re bundling products together.
Some lenders waive these fees entirely, while others don’t. This is where working with a broker really makes a difference, because we compare more than just interest rates. We factor in all the fees and help you understand the true cost of each loan option.
Lenders Mortgage Insurance (LMI)
If you’re borrowing more than 80% of the property’s value, you’ll likely need to pay Lenders Mortgage Insurance. It’s worth knowing upfront that LMI protects the lender, not you, and it can cost anywhere from a few thousand dollars to tens of thousands depending on your loan size and deposit.
The good news is that LMI can sometimes be added to your loan amount rather than paid upfront, which helps with cash flow. And for some buyers, especially first home buyers, paying LMI might be a smart move because it means they can get into the market sooner rather than waiting years to save a bigger deposit. It’s not automatically a bad thing, it just needs to be part of your strategy.
Settlement Adjustments
This one catches people by surprise more than almost anything else. At settlement, you’ll usually need to reimburse the seller for things they’ve already paid, like council rates, water rates, and strata levies (if you’re buying a unit or townhouse). These costs are calculated on a pro-rata basis depending on the settlement date.
Depending on timing, this could be a few hundred dollars or a few thousand. It’s not advertised anywhere in the listing, so it’s easy to forget about until your conveyancer sends through the final settlement statement.
Moving and Setup Costs
Once the property is yours, you’ve still got to actually move in or get it ready for tenants. That might mean hiring removalists, connecting utilities like electricity and gas, setting up internet, or buying furniture and appliances.
For investors, there are additional setup costs to consider. You might need to pay property management setup fees, advertise for tenants, or do initial maintenance and safety upgrades to meet compliance requirements. These aren’t huge costs individually, but they add up, and they’re easy to overlook when you’re focused on the excitement of settlement.
Ongoing Ownership Costs
This is where the real long-term budget planning comes in. Once you own the property, there are ongoing costs that start immediately, whether you’re living in it or renting it out.
If you’re an owner-occupier, you’ll be paying council rates, water rates, home and contents insurance, and covering any maintenance that comes up. If you’re an investor, you’ve got all of those same costs, plus property management fees (usually around 7-10% of the rent), potential land tax depending on your portfolio, and the occasional vacancy period where there’s no rent coming in.
These costs don’t affect your deposit, but they absolutely affect your long-term affordability and cash flow. If you’re an investor, knowing these numbers is critical to making sure your property is positively geared or at least manageable if it’s negatively geared.
Putting It All Together
A lot of people think they’re ready to buy once they’ve saved their deposit, but that’s only part of the picture. A more realistic way to think about it is this: you need your deposit plus an extra buffer to cover all the upfront and setup costs. As a rough guide, many buyers need an additional 3-6% of the purchase price on top of their deposit, depending on their situation.
The buyers who feel confident and in control at settlement are the ones who’ve planned for all of this ahead of time. They’ve asked the right questions early, worked out what they can genuinely afford, and structured their finances to cover not just the deposit but everything that comes with it. This is why it is important to know when you should talk to a broker.
If you’re not sure how these costs apply to your specific situation, whether you’re a first home buyer, upgrading, or investing, that’s exactly the kind of conversation we’re here to have. Getting advice early can completely change your strategy and help you avoid surprises down the track.
At Swish, we want you to feel prepared, confident, and excited about your property journey. Let’s make sure you’ve got the full picture before you take the next step. Book in a chat with us today.