Buying a home
Steps to buying a home
Buying a home is a major decision that takes planning, research
and careful budgeting. Here are some tips to help you get
Shelley Craft's home
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How much do I need to buy a
There are a number of costs to consider when you buy a home. The
biggest upfront cost is usually a deposit.
How much deposit do I need?
A deposit of 20% of the purchase price plus enough to cover
ongoing costs is ideal.
The bigger your deposit, the lower your loan to value ratio (LVR) will be. This
is the amount of the loan divided by the purchase price (or
appraised value) of the property.
If your LVR is higher than 80%, you will usually need to pay lender's mortgage insurance, and the
lender could charge you a higher interest rate. Avoid these extra
costs by saving a bigger deposit to lower your LVR.
Saving for a home deposit
Building a home deposit can take a long time. But, by
establishing a good savings habit and sticking to it, you can watch
your savings grow.
Setting up a dedicated high-interest savings account is a great way to save
for a home deposit. You can transfer money into the savings account
each pay based on what your budget allows. Or, better yet, set up a
direct debit to transfer the money automatically, so you're less
likely to spend it.
for a home for more tips on building a home deposit.
Work out how long it will take to reach your savings goal.
Savings goals calculator
Talk to your partner about saving
If you're saving with a partner, talk about where you can cut
back on your spending. Open communication is really important and
you can motivate each other along the way.
See relationships and money for
tips on managing finances with your partner.
Sharing the cost
If buying your own home always seems to be just out of reach,
you might consider getting help from an equity partner
through a shared equity scheme.
What are the upfront costs of
buying a home?
When you're buying a home you need to know what the upfront
costs could be.
This is a state tax on all home purchases, based on the property
price, location and type of home loan you have. This will be a
one-off payment that you need to factor into your budget.
Stamp duty calculators
Find out how much you'll need to pay in stamp duty by using the
calculators on these websites:
ACT - Revenue Office: Conveyance duty
NSW - Revenue NSW:
Calculator - for land and property transfers
Department of Treasury and Finance: Stamp duty calculators
QLD - Office of
State Revenue: Transfer duty calculator
SA - RevenueSA
calculator: Stamp duty on conveyances
Department of Treasury and Finance: Property transfer duty
VIC - State Revenue
Office: Our calculators
WA - Department of Treasury and Finance:
Legal and conveyancing fees
A conveyancer or solicitor will help you meet all legal
requirements involved with purchasing your home. They'll handle
most of the paperwork and can answer any questions you may have
about the process and explain the terms and conditions of the
Ask your conveyancer for a written estimate of their costs. This
should include a breakdown of the likely payments to the local
council, water and electricity companies.
Do your research before hiring a conveyancer. Ask your family
and friends if they can recommend someone they've used before, or
ask your real estate agent for their recommendation.
Removalist and cleaning costs
You need to budget for the cost of moving all your belongings to
the new property. Get quotes from a few different removalist
companies, or hire a truck or trailer and ask friends to help you
Consider whether you want to pay for a professional to clean
your old property before you hand in the keys. Your new property
may also need cleaning before you move in.
Once you've decided on a property, it's a good idea to get a
qualified building inspector to assess it for structural integrity,
safe electrical fittings and future maintenance costs. You should
also get a pest inspection to ensure the property doesn't have a
termite problem or other pest issues. These checks will help to
give you peace of mind and could save you a lot of money in the
What mortgage can I
Working out what mortgage you can afford is about striking a
balance between the lifestyle you want and the one you can
comfortably afford. Make sure you know what ongoing costs you'll
have to manage on top of your repayments once you move into your
Ongoing costs of buying a home
There are a lot of ongoing costs you'll have to manage on top of
your repayments once you move into your new home. These
Home and contents insurance
Consider buying home insurance to protect your new
property. This is a condition of most home loans, as it covers the
cost of rebuilding or repairing your home. As well, if you don't
already have contents insurance, now is the time
to consider protecting your possessions if they are lost, damaged
or stolen. Homeowners often combine home and contents insurance
into a single policy.
Council rates and strata fees
How much you'll need to pay in council rates depends on where
the property is located. Each local council calculates the rates
based on land values in the area. The money is used to fund local
services and maintain public spaces and infrastructure.
If you buy an apartment, your council rates will generally be
lower, but you will also have to pay strata fees. These cover the
costs of building maintenance, electricity and water charges for
common areas, and the general upkeep of common areas such as a
pool, lift or gym.
You might need to do some renovations before you move in, so
make sure you know all the costs before you agree to a price for
your new home. Then you'll be able to work out what you can
Utilities and household bills
Once you've settled into your new home, your household bills
will start to arrive. Services like water, electricity, gas and
internet are all ongoing costs that can really add up. It is
important to budget for these, along with other everyday
Create a future home budget
Picture yourself in the home you want and create a budget based
on that, including all the expenses you're likely to have, from
rates and utilities to everyday spending at the supermarket and
Create a 'future home budget'.
Your budget will show you how much money will be left over each
fortnight. This should give you an idea of what mortgage repayments
you can afford.
For example, your household budget might show that your income
is $2,500 per fortnight and your living costs are $1,000 per
fortnight. From the remaining $1,500 you'll need to work out how
much you can comfortably contribute towards mortgage
Work out how much your repayments will be with different
Build a savings buffer
Maintenance can be expensive when you own a home, so make sure
you build a savings buffer so you can cope with unexpected costs,
like emergency electrical or plumbing work. Visit our webpage for
tips on building an emergency savings
Another thing you can do is choose a loan that allows extra
repayments so you can build a buffer and then redraw it later if
you need it.
First home buyers
Make sure you know what you're entitled to in terms of first home owner grants, as
these can boost your deposit significantly.
You should also find out if the first home super saver
scheme can help you save for a home. From 1 July 2017, first
home buyers can save for a deposit by making voluntary
contributions to their super fund. You can access the money
from 1 July 2018.
First home buyers are also eligible for stamp duty concessions
in some states and territories. Check with your state's revenue
office for details.
Before you start looking for a home, do a budget
to work out how much you can afford in mortgage repayments.
Consider additional costs such as stamp duty and legal costs, as
well as ongoing costs such as insurance and council rates.
Last updated: 04 Feb 2019