Buying a home: The upfront costs
When taking out a mortgage, there are fees and expenses you need to account for in addition to the property cost. Amidst the stress of applying for a home loan, these can easily be forgotten.
Here are some of the extra costs that you’ll need to consider when you take out a home loan.
- Mortgage application fees – This is a lender fee for setting up a mortgage. Most lenders charge additional fees such as loan service fees costing up to $1000. Be sure to ask your lender to itemise everything and see if they can offer reduced fee deals or package. A good broker will check this for you.
- Mortgage registration fee – This is a government fee for registering your mortgage on the title of your property costing you up to $200.
- Registration of transfer fee – You as the new owner of the property need to be registered at the Land Titles Office. This cost varies significantly across Australia, you can find details of the charges on the website of the state/territory revenue office here.
- Stamp duty – This would be your biggest upfront cost. Stamp duty is a tax by your relevant state or territory government that is calculated based on the price of the property. Special exemptions may apply if you are a first home buyer, read our blog to find out more.
- Lenders Mortgage Insurance – If you don’t have 20% of the property price or the value of the property, the lender will require you to pay for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments and can cost you tens of thousands dollars. However, if you are an accounting or finance professional with evidence of a professional body membership you could be eligible to have this cost waived.
- Solicitor/conveyancing fees – Your conveyancer or settlement agent should be engaged before you make an offer. They handle the transfer of ownership of the property on your behalf, which can cost up to $2500. This can include:
- Completing a property and title search to ensure that the seller is legally entitled to sell.
- Reviewing and exchanging the contract of sale
- Arranging to pay stamp duty
- Organising strata inspections and checking the body corporate records
- Building and pest inspection fees – It is recommended that you organise for these inspections of the property to avoid unexpected issues later such as pest infestations or structural problem. The inspections can set you back by up to $1000, but it’s well worth the cost.
- Set up fees - The costs of connecting your utilities such as electricity or internet and paying any upfront council and water rates can all add up. The amount can vary depending on when you settle and your agreement with the vendor. Also, organising connections for before or day of moving day will make the moving process a breeze. It is recommended to keep aside at least $1000 for these costs but it is wise to check with your conveyancer as well.
- Body corporate fees – If you buy an apartment or Strata Titled property, be sure to request a strata report. This is useful to check if there are any disputes or debts and if it is managed well. In many cases buyers may skip this step and end up with an unpleasant surprise. A strata office or your lawyer can do the search for you and provide you with legal advice. The strata report can cost around $400 plus any extra legal fees depending on your situation.
- Maintenance costs – Don’t forget to make provision for unexpected maintenance on your home, even if you decide not to undertake significant renovations. Maintenance costs can include lawn care, plumbing and small repairs.
- Moving/furniture costs – Depending on whether you are moving with existing furniture or purchasing new furniture, the costs of this can add a few thousand dollars to your upfront costs.
- Home & contents insurance – Most homeowners insure their home and contents against a range of threats including burglary, fire and storm. If you have a mortgage, building insurance is compulsory can cost $1000 a year. Contents insurance, however, is not mandatory but recommended.
- Life and income protection insurance – Although this is not compulsory, you should consider protecting yourself and your income while you have a mortgage. Income protection provides cover in case you cannot perform your usual occupation due to sickness or injury. Life insurance on the other hand can provide money to your nominated beneficiaries in the event of your death or diagnosis of illness to cover outstanding mortgage or debts.
It’s a long list of fees we get it! Don’t be overwhelmed, a lot of these costs can vary and a good broker will try to reduce your mortgage and bank fees as far as possible.
Speak to our team today to find out what the best home loan option is for you.
The Federal Government’s negative gearing and Capital Gains Tax (CGT) reforms represents a significant shift in how future property investments will be treated for tax purposes. For investors considering their next purchase, the changes may influence everything from the type of property they buy to how they assess cash flow and long-term returns. Legislated, many investors are reassessing their property purchasing plans and strategies. The core reforms have now passed Parliament, although some of the more detailed implementation rules are still being finalised ahead of their commencement. If you’re looking to buy an investment property down the track, here’s what you need to know about the reforms and how they change the playing field. What is changing? On 12 May, Treasurer Jim Chalmers handed down the Federal Budget , which included major changes to negative gearing and CGT rules. From 1 July 2027: Negative gearing for residential property investments will be limited to new builds. The 50 per cent CGT discount will be replaced with cost base indexation and a 30 per cent minimum tax rate on capital gains. Properties held before the announcement (7:30pm AEST 12 May 2026) will be exempt from the negative gearing changes, while the CGT reforms will only apply to gains accruing after 1 July 2027. How have the reforms affected the market and investors? When the changes were announced, Australia’s property market had already been cooling, driven by a combination of cash rate hikes, housing affordability constraints, the Middle East conflict, and cost-of-living pressures. But the Federal Budget reforms dampened the market even further, with auction clearance rates slipping to levels worse than during the pandemic, and investor confidence dropping. One survey of more than 1,400 Australian investors found that more than 80% believed residential investment property had become less attractive following the 2026 Federal Budget changes. At the same time, 51.5% said they planned to hold their existing investments and wait to see how the proposed legislation evolves. Overall, the survey offers a useful snapshot of investor sentiment, although it should not be taken as representative of every Australian property investor. Key shifts in strategy Since the announcement, there have been early signs that some investors are reconsidering where and how they invest, although it is too soon to say how the reforms will reshape the broader property market over the long term. New builds could attract more attention With negative gearing limited to new builds from 1 July 2027, there are signs that some investors are pivoting towards newly constructed properties. Data from property fund manager Oliver Hume shows the proportion of new-build sales to investors in Victoria has risen above 40 per cent for the first time since December 2024, for example. Experts say investors will likely switch to new units or houses on the outer city fringes, while suburbs in the middle of cities could experience a decrease in stock, potentially resulting in higher rents . Holding or grandfathering existing assets Investors with established properties purchased before 12 May 2026 may choose to retain those properties, as they are exempt from the negative gearing reforms and can continue to access the existing tax treatment that applies to grandfathered properties. These investors can keep negative gearing the property against their wage income and retain the full benefits until they sell. Cash flow could become an even bigger consideration Historically, negative gearing enabled investors to offset losses on established investment properties against their taxable income. But under the changes , investors purchasing established properties would no longer receive immediate tax relief on those losses. The changes may prompt some investors to focus more heavily on rental yield , cash flow and long-term returns when assessing investment opportunities. As a result, positively geared properties could become more attractive relative to investments that rely heavily on tax concessions to support returns. Some may also look for properties with the potential to transition to positive gearing over time as rental income grows. What about the changes to SMSF borrowing? In addition to the CGT and negative gearing reforms, there are new rules around self-managed super fund (SMSF) borrowing. From 10 August 2026, SMSFs can no longer use Limited Recourse Borrowing Arrangements (LRBAs) to buy residential property. Current LRBAs are grandfathered. SMSFs can still purchase residential property outright using cash , and LRBAs can be used to acquire business real property. The changes have been met with mixed reviews among investors, and some critics questioning whether it would make it harder for Australians to build retirement wealth . Some experts also believe that the changes could increase the appeal of commercial property among SMSF investors, although SMSF property investment can involve complex lending, tax and superannuation requirements, so specialist financial, legal and tax advice is particularly important. Considering an investment property purchase? The changes in the budget mean investors may need to think differently about the type of property they purchase, its cash flow and how the investment fits within their broader financial plans. While we can’t provide tax or financial advice, we can help you understand the lending side of the equation. We can review your borrowing capacity, compare suitable loan options and help you understand how different property and loan scenarios could affect your repayments and overall finance structure. If you’re considering your next investment property, get in touch! We can help you explore your finance options so you can make your next move with a clearer understanding.
After years of fierce competition, fast-rising prices and crowded auction weekends, the market is beginning to show signs of a shift. More properties are being listed for sale, homes are taking longer to sell, and buyers are becoming increasingly selective about what they’re willing to pay.
