Costs of buying a house in Australia
When planning to buy a house, there are extra costs that may pile up once you sign the contract. So, how much does it really cost to buy a house?

When planning to buy a house, there are extra costs that may pile up once you sign the contract. So, how much does it really cost to buy a house?
KEY POINTS
- The average Australian house costs around $976,800, according to figures from the Australian Bureau of Statistics (ABS) at the time of writing.
- Excluding interest and the deposit, upfront costs can total as much as $40,000 or more depending on certain factors.
- Some of the additional costs associated with buying a house are legal fees, government duties, loan fees, insurance, inspections and moving related costs.
What is the average cost of buying a house?
An average Australian house could set you back around $976,800, according to figures from the Australian Bureau of Statistics (ABS) at the time of writing. This high cost of housing has seen many Australians turn to home loans in order to secure property.
The main function of a home loan is simple: people borrow a fixed amount of money to purchase property that they wouldn’t have been able to finance outright otherwise. When calculating how much you’ll need to borrow, it’s important to consider how much of a deposit you’ll need and what the repayments, plus interest, will be over the life of the loan. Home loan pre-approval might also be worth considering, as it can give you a better idea of how much you can borrow.
What are the hidden costs of buying a house?
There are many other costs for buying a house on top of deposits, interest and mortgage repayments. Excluding interest and the deposit, upfront costs can total as much as $40,000 or more, depending on the conditions of your loan, where you live and how much you want to borrow. Many of these costs are for legal paperwork and setting up the loan, which are reflected in a loan’s comparison rate. A comparison rate is an estimate of a loan’s total cost when interest and extra fees are added in.
When shopping around for the right home loan, it’s important to understand the extra costs so you can plan your finances accordingly. Let’s take a look at some of these fees in more detail.
Legal and/or conveyance fees
The process of buying a home requires navigating the legal system to some extent. Conveyancing is the process of transferring the legal title of a property from the current owner to a new one.
A conveyancer (or a solicitor who performs conveyancing services in QLD or the ACT) is a legal professional who helps represent you when buying a home. They can assist with negotiating a contract through to finalising a settlement, and can also perform legal searches and submit official documentation to various government departments on your behalf. All up, you can expect to pay between $500 and $1500 for conveyancing services across Australia, according to the real estate agent directory, Which Real Estate Agent. Remember, conveyancers and solicitors can vary in terms of price and overall quality of services, so it’s important to do your research before engaging one.
Stamp Duty/Transfer Duty
Stamp Duty, which is also called Transfer Duty, is a government tax on large transactions like vehicles or real estate. How much you’re charged for Stamp Duty depends entirely on which state or territory you’re purchasing in and how much the house costs. If you have to pay it, this additional cost can vary from thousands to tens of thousands of dollars—or even more in some cases. The amount you may have to pay will vary depending on:
- Whether or not you’re a first time buyer
- How you’re planning to use the property; whether it’ll be your primary residence or if you’re using it as an investment property
- What type of property it is. Is it an established home or apartment, or simply a vacant lot?
- Whether or not you classify as a foreign purchaser
- If you qualify for any stamp duty or transfer concessions.
When considering buying a property, you could use tools like Canstar’s Stamp Duty Calculator as a general reference to work out how much it might cost you.
Loan application and/or establishment fees
Loan application and establishment fees are some of the immediate costs associated with setting up a home loan. Not all lenders charge this kind of fee, but those that do charge between $150 to $990, according to Canstar Research. Initial home loan fees like valuation, legal and settlement fees may also be charged.
Lenders are legally required to display the comparison rate alongside the loan product’s interest rate. You can use this as a guide to how much the loan could cost when compared to other loans of the same type. For example, the Canstar Home Loan Comparison tool displays both the interest rate and the comparison rate for each loan.
Keep in mind that not all lenders charge the same home loan fees and some will waive the ones they do under certain circumstances. Remember to check the details of who you’re applying with, as some lenders often waive certain fees entirely for first-time home buyers.
For more detailed information on home loan related fees, you can read our article on home loan and mortgage fees you should know about.
The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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Mortgage registration fee
A mortgage registration fee is paid to the state or territory government and allows your physical property to serve as a security for your home loan. It also allows future buyers to check if there are any other claims, interest or encumbrances on the property before they buy. This fee is usually smaller and varies depending on which state or territory you’re in. There may be online services and calculators that may help to give you an estimate.
Lenders Mortgage Insurance (LMI)
Lenders mortgage insurance (LMI) can be a mandatory cost for some borrowers, as it provides your lender with financial protection should you default on your home loan. It’s often required for home-buyers who take out a home loan with a deposit that’s less than 20% of the property’s total value.
The cost of LMI can vary depending on your circumstances. For example, some higher risk purchases or borrowers may require LMI regardless of how much deposit is being paid. Borrowers in low risk categories, such as those working in certain professions or those with home loan guarantors, might not have to pay it at all, even if they have less than 20% deposit. Government schemes like the First Home Guarantee (FHBG) may also help borrowers avoid paying LMI, as the government is serving as a guarantor for the borrower’s loan.
The cost of this insurance depends on the loan-to-value ratio (LVR) which is another way of stating what percentage of the property you’re buying outright with the deposit. For example, if you’re buying a property worth $600,000 and you have a deposit of $120,000, then the LVR is 80%. If you only have $10,000, your LVR is 90%. Generally the higher the LVR, the higher your LMI premiums will be.
Home insurance
While it’s not usually a legal requirement to have home insurance, some lenders may require you to purchase it as a further form of security on your home loan. This could be required from the day you sign the contract, so be sure to ask your lender what their expectations are in regards to home insurance. Keep in mind that this can vary between different states and territories, as contract laws can differ depending on the nature of the contract. For more information, please refer to Canstar’s Home Insurance resources.
Pest and building inspections
Unexpected problems can arise when owning a property; from pest infestation to mould to structural defects. It’s important to consider obtaining a pest and building inspection before buying, as they can help reduce the risk of larger costs if the problems are left unattended. For example, there could be termite damage hidden from view, issues with insulation or building code problems that only a professional inspector could identify. In some cases, buyers could use this information to request the seller bring the property up to a certain standard, or to reduce the contract price as compensation for having to do the work themselves. It could even be cause for the cancellation of a contract.
While house inspections may not be mandatory, they are highly recommended according to the Federal Government’s Moneysmart website. It’s generally a good idea to set aside at least $400-$500 for these types of inspections, according to the trades job listing platform, hipages.
Moving costs
If you’re planning to move into the property you intend to buy, it’s a good idea to incorporate the cost of moving into your financial planning. Removalist costs can vary depending on the number of belongings you have, how much moving you plan to do yourself, where you are moving to and what access is like in your new place.
Connection costs
Connecting your home to essential services, like power, gas, phone and internet, typically involves a fee. The total cost of this can vary depending on where your home is located, what level of service you would like and what access to the property is like. Factors like terrain, height and distance to the power grid, for example, can greatly affect the final price of energy connections. You may like to compare options with Canstar Blue’s energy and NBN comparison tools, before making a purchase.
If you’re looking to compare home loans, you can do so by using Canstar’s comparison tables. It’s important to read through any relevant documentation, such as the Product Disclosure Statement (PDS) and Target Market Determination (TMD), for any loan product you are considering. As taking out a home loan is a large financial commitment, it’s recommended that you obtain professional financial advice before doing so.
Cover image source: Srdjan Randjelovic/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.

- What is the average cost of buying a house?
- What are the hidden costs of buying a house?
- Legal and/or conveyance fees
- Stamp Duty/Transfer Duty
- Loan application and/or establishment fees
- Mortgage registration fee
- Lenders Mortgage Insurance (LMI)
- Home insurance
- Pest and building inspections
- Moving costs
- Connection costs
The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Try our Home Loans comparison tool to instantly compare Canstar expert rated options.
The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.