1. The Deposit

Deposits are usually at least 5-10 percent of the home’s overall cost, depending on the type of loan you obtain.

To determine how much your deposit will be, consider:

• The average home price of the area in which you wish to buy
• The type of loan you wish to get
• The amount you wish to borrow

If you already own a home, you may be able to access the equity to cover the deposit. If there isn’t enough equity, you’ll have to save more for the deposit.

2. Stamp Duty Costs

Stamp duty is a charge that is applied to the sale of residential property by state governments. It is not a fixed cost across the country - it differs in each state and territory so make sure you find out about the stamp duty costs for your area.

The cost is usually calculated based on the price of the home you purchase, but each state has its own system.

The rate often differs depending on several factors:

• Whether you are purchasing vacant land or a brand new house.
• If you are using the home as your main place of residence.

It can be complicated to work out stamp duty on your own, as there are many rates that apply to different house prices but it can be a hefty figure so make sure you are aware of this and have enough money. Use an online calculator to help you determine the cost.

3. Lenders Mortgage Insurance (LMI)

In many cases, if you want to borrow more than 90% of the property purchase price you will be charged Lenders Mortgage Insurance.  This insurance payment covers the lender in the event that you can’t pay the home loan back.

Get your budget and savings in order well before you buy to avoid this hurdle! The cost of LMI will vary depending on how much you borrow and the type of loan you select but it can be up to $10,000.

4. Legal Help

Buying a home is fundamentally a legal process so the help of legal experts, namely conveyancers and solicitors is critical. They will be an invaluable part of property negotiations and can help you through the paperwork.  However, remember they will charge a fee so make sure you factor this in.  Some conveyancers will charge a flat fee while others will charge a sliding fee based on the properties sale price.  Make sure you discuss fees and charges before you engage their services.  Budget between $1500 - $3000.

5. Building Insurance

When you’re spending your life savings on purchasing property it makes sense to protect it. While building insurance is a compulsory requirement from your lender, there are other insurance policies that you should consider.

For example mortgage protection insurance will ensure your mortgage repayments are met should you fall seriously ill. Income protection insurance will also help pay the bills should you be hit by an accident, major trauma or illness.

6. Council Rates and Strata Fees

Once a seller hands their property over, you immediately inherit all of the attached council and strata fees.

While both owners of houses and units are obliged to pay council rates, it is only owners of units or apartments that will have to incur strata fees.

Strata fees cover the property’s grouped maintenance and building insurance fees and are collected by the building's owners' or manager. These fees are ongoing costs that will continue to absorb your finances, generally quarterly, even after your initial property purchase payment, so it’s important to incorporate these into your ongoing budget.

The scope of strata fees will vary considerably depending on the age of the building, facilities, and location but you should expect to pay around $70 to $80 for the lodgement of the application.

7. Building, Pest, and Strata

Having a building and pest inspection carried out on any property is usually a requirement by the lender but they are well worth investing in regardless.

If you are considering purchasing a unit or apartment, it is also in your best interest to have a strata inspection conducted  - that is a report on the assets, liabilities and financial position of the apartment complex.

While having a building, pest or strata inspection completed on the potential property will cost you initially, it could be an invaluable safeguarding against buying a lemon.

Expect to pay around $400 for a building or pest inspection and around $200 for a strata report.

8. Having a Little Bit Extra

You may have done all your research and been prepared for all the major hidden extras, but you should always set aside a little bit extra for those expenses you are not expecting.  Expenses like moving fees, utility connections, mail redirection etc.

Everything Adds Up

It is really important to consider all the extra costs that can / will apply to your property purchase otherwise the settlement time can be extremely stressful. 

As a general rule if you factor in an additional 5-7% of the purchase price, on top of your deposit it should be approximately enough to help you cover the hidden extras.

Understanding the costs of buying a home is important as they may influence your decision to buy a certain townhouse or apartment, so it's best to determine how much this is before you commit to a property.

While these are not all significant figures individually, they can add up to a sizeable sum. Be sure you can pay for them as they arise.