Buying a home is a significant milestone, but the financial commitment extends beyond the purchase price. If you’re considering buying a property in Victoria, familiarising yourself with all the associated costs is essential to ensure a smooth transaction and avoid surprises.

Here’s what you need to know about the various expenses involved:

Stamp Duty

In Victoria, stamp duty, or land transfer duty, is a significant expense calculated based on the property’s purchase price.

For instance, a property priced at $745,000 would attract a stamp duty of $39,770. However, Victoria offers concessions for first-time homebuyers purchasing properties under $750,000.

Lenders Mortgage Insurance (LMI)

If your deposit is less than 20% of the home’s value, you’ll likely need to pay LMI. This insurance protects the lender in case the owner defaults on the loan.

For a property worth $750,000, the LMI could be approximately $32,554.

Conveyancing Fees

Legal fees are inevitable in property transactions. In Victoria, they can range from $720 to $2,200, depending on the property’s complexity and value.

Building and Pest Inspections

Ensuring the property is structurally sound and pest-free is crucial. Costs can vary, with combined building and pest inspections generally costing around $450 for a standard home.

Additional Costs

  • Mortgage Application Fee: This varies by lender but can be around $150 if not waived.
  • Valuation Fee: Essential for loan processing, the cost is typically about $200.
  • Registration of Title: In Victoria, registering your mortgage on the title costs $119.
  • Home and Contents Insurance: The average annual cost for a typical 3-bedroom home in Victoria is around $1,500, though this can vary based on specifics.

Ongoing Costs After Buying a Home

Once you’ve secured your new home, remember to budget for ongoing expenses:

  • Home Loan Payments: Your mortgage payments will likely account for most of your monthly expenses. For example, at current mortgage rates, a $600,000 loan at a 6.59% interest rate over 30 years would equate to monthly repayments of about $3,828.
  • Utilities: Expect to pay around $1,392 annually for electricity, $988 annually for water, and about $828 annually for an NBN internet connection.
  • Maintenance and Renovations: Costs can vary for major renovations or minor repairs. A kitchen or bathroom renovation could cost tens of thousands, while more minor repairs might only cost a few thousand dollars.

Understanding these costs can help you budget more effectively and navigate the process of buying a home in Victoria with confidence.