Buying a property is one of the most exciting milestones in a person’s life – but for many buyers, especially first-timers, the focus tends to narrow quickly to two things: saving a deposit and securing a loan. While those are undeniably the big-ticket items, they’re far from the whole picture. There are several additional costs that can take buyers by surprise if they haven’t planned ahead. Here are five of the most important ones to be aware of before you start your property journey.
1. Stamp Duty
Stamp duty is a government tax levied on the transfer of property, and it’s one that many buyers underestimate until they’re well into the process. The amount you’ll pay depends on the purchase price, the state or territory you’re buying in, and – importantly – whether you’re purchasing an owner-occupied home or an investment property. First home buyers may be eligible for concessions or exemptions, while investors generally pay the full rate. It’s worth clarifying your situation early and including the correct figure in your overall budget.
2. Conveyancing Fees
When you purchase a property, you’ll need a licensed conveyancer or solicitor to manage the legal transfer into your name – this is a requirement, not an optional extra. Fees typically cover title searches, preparing and reviewing contracts, and representing you at settlement. Costs can range from a few hundred to over a thousand dollars, so it pays to get a few quotes and understand exactly what’s included. Having a competent professional on your side helps protect your interests at every stage.
3. Building and Pest Inspections
A building and pest inspection will set you back a few hundred dollars, but it could save you tens or even hundreds of thousands down the line. Structural issues, water damage, and termite infestations are not always visible to the untrained eye, and they can be enormously expensive to rectify once a property is yours. An independent inspection report gives you the power to negotiate on price, request repairs before settlement, or walk away from a deal that could have become a financial nightmare. Never skip this step.
4. Loan Serviceability and Interest Rate Buffers
There’s an important difference between being approved for a loan and being able to comfortably service it over the long term. Interest rates can – and do – rise, which means your repayments can increase significantly over the life of your loan. Lenders apply a serviceability buffer when assessing your borrowing capacity, but it’s worth doing your own stress-testing too. Ask yourself: if rates rose by two or three percent, could you still manage your repayments comfortably? If the answer is uncertain, consider borrowing a little less than your maximum to give yourself room to move.
5. Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the purchase price, you’ll likely be required to pay Lenders Mortgage Insurance. Despite the name, LMI protects the lender – not you – in the event that you default on your loan. It can add thousands of dollars to your upfront costs and is typically capitalised into the loan balance, meaning you’ll also pay interest on it over time. Whether it makes more sense to wait and save a larger deposit or enter the market sooner is a decision your broker can help you model carefully.
The Takeaway
The true cost of buying property extends well beyond the purchase price. By planning ahead for stamp duty, conveyancing fees, building and pest inspections, loan serviceability, and potential LMI, you’ll be in a much stronger position to move forward with confidence – and without any nasty surprises.
Ready to Take the Next Step?
Whether you’re a first home buyer navigating the process for the first time or an experienced investor looking to grow your portfolio, the team at The Brokerage is here to help. We’ll walk you through all the costs involved, help you understand your borrowing capacity, and make sure you’re fully prepared before you commit.
Contact us here for a no-obligation consultation. 
