Beyond the Purchase Price: Hidden Costs First Home Buyers Forget
“We had $70,000 saved for our $650,000 apartment. We thought we were set with more than 10% deposit. Then the bills started arriving.”
Michael spent an additional $38,000 he hadn’t budgeted for. Between stamp duty, inspections, legal fees, moving costs, and setting up the home, he ended up maxed out on credit cards with no emergency buffer. This scenario is far too common. Let me break down every cost you’ll actually face.
The Major Upfront Costs
- Stamp Duty (Your Biggest Cost)
NSW Examples (without first home buyer exemption):
- $500,000 property: ~$18,000
- $650,000 property: ~$26,000
- $800,000 property: ~$32,000
Good news: First home buyers get full exemption up to $800,000 in NSW. See Article 3 for your state’s benefits.
- Building and Pest Inspections
Never skip these. A $500 inspection can save you from a $50,000 problem.
Costs: $600-$1,200 per property you seriously consider
If you inspect 3-4 properties before buying, budget $2,400-$4,800 total.
- Legal and Conveyancing Fees
Your solicitor handles the property transfer:
- Standard conveyancing: $1,200-$2,500
- Additional searches and certificates: $300-$500
Total: $1,500-$3,000
- Lender Fees
- Application fee: $0-$600 (often waived)
- Valuation fee: $0-$400
- Settlement fee: $0-$400
Total: $200-$1,200
- Lenders Mortgage Insurance (If Applicable)
If buying with less than 20% deposit:
- 10% deposit on $650,000: ~$17,000-$19,000
- Use First Home Guarantee to eliminate this (see Article 4)
Settlement and Moving Costs
- Moving Costs
- Professional removalists: $1,000-$2,500 (local)
- Packing materials: $100-$300
- Cleaning: $200-$500
Total: $1,500-$3,000
- Connections and Initial Setup
- Utility connections: $200-$500
- Settlement rate adjustments: $500-$1,500
- Home and contents insurance: $800-$2,000 (first year)
Total: $1,500-$4,000
Setting Up Your Home
- Essential Items
Must-have appliances:
- Refrigerator: $600-$2,500
- Washing machine: $500-$1,500
- Basic furniture: $3,000-$8,000
Total for basics: $5,000-$15,000
Money-saving tip: Buy essentials first, add furniture gradually over 6-12 months.
- Immediate Repairs and Improvements
- Changing locks: $150-$400
- Minor repairs: $500-$3,000
- Curtains/blinds: $1,000-$4,000
Total: $2,000-$8,000
Real-World Example: What It Actually Costs
Buying a $650,000 property in NSW with 10% deposit:
Cost Amount
Deposit (10%) $65,000
Stamp duty (FHB exemption) $0
Inspections $700
Legal fees $1,800
Lender fees $400
LMI (First Home Guarantee) $0
Moving $2,000
Connections & insurance $1,500
Furniture & appliances $8,000
Immediate repairs $3,000
TOTAL CASH NEEDED $82,400
Beyond your deposit, you need an extra $17,400 minimum.
Ongoing Costs: What You’ll Pay Monthly
Don’t forget the ongoing expenses:
Expense Monthly Cost
Mortgage repayment $3,000-$5,000
Council & water rates $165-$320
Strata (if apartment) $165-$665+
Insurance $65-$165
Utilities (electricity, gas, internet) $260-$550
Maintenance buffer $165-$400
TOTAL MONTHLY $4,000-$7,000+
Your total housing costs will likely be 20-40% higher than your current rent.
The Simple Budgeting Rule: Save 25% of Purchase Price
Budget 25% of your purchase price for everything (deposit + all costs):
- $500,000 property = Save $125,000 total
- $650,000 property = Save $162,500 total
- $800,000 property = Save $200,000 total
This covers your deposit, all purchase costs, and leaves a small emergency buffer.
Five Budgeting Mistakes to Avoid
- Only Saving for the Deposit Michael’s mistake. Save for the deposit PLUS additional 15-20% for other costs.
- Maxing Out Your Borrowing Capacity Leave room for interest rate increases and life’s unexpected expenses.
- No Emergency Fund Keep $10,000-$15,000 accessible after settlement. Something will need fixing in the first year.
- Underestimating Furniture Costs $15,000 disappears quickly. Buy gradually to avoid credit card debt.
- Forgetting Ongoing Costs Increase Your mortgage, rates, insurance, and maintenance will cost more than your previous rent. Make sure your budget can handle it.
Your Pre-Purchase Checklist
Before making an offer, confirm you have:
- Deposit saved (5-20% of price)
- Stamp duty covered (or confirmed FHB exemption)
- $5,000-$10,000 for inspections, legal, and lender fees
- $3,000-$5,000 for moving and setup
- $5,000-$15,000 for essential furniture
- $10,000-$15,000 emergency buffer AFTER all costs
Key Takeaway
The property price is just the starting point. Smart first home buyers:
- Save 25% of purchase price (not just the deposit)
- Keep emergency funds accessible after settlement
- Buy furniture gradually over 6-12 months
- Budget for ongoing costs 20-40% higher than current rent
Don’t get caught short like Michael. Know your true costs before you commit.
What costs caught you off guard, or what are you most worried about budgeting for? Share in the comments.
Chirag at Next Gen JC help first home buyers understand the complete financial picture before purchasing, ensuring you’re prepared for every stage of homeownership.
📞 Ready to understand your true costs? Book a free consultation at nextgenjc.com.au or call 0478797785