You've saved your deposit, got pre-approval, and you're ready to buy. But the purchase price on the contract is just the beginning. The real cost of buying your first home is significantly higher than most people expect — and the surprises can blow your budget if you haven't planned for them.
We surveyed dozens of recent first home buyers across Australian property forums, and the same frustration came up again and again: "I wish someone had told me about these costs before I started looking." So here they are — every major hidden cost, with realistic estimates so you can plan properly.
The Costs Before You Buy
Building & Pest Inspection
This is non-negotiable for any house purchase. A qualified inspector will check the structure, roof, plumbing, electrical, and pest activity (especially termites). The catch? If you miss out on a property, you've paid for an inspection you'll never use. First home buyers who attend multiple auctions or make several offers can easily spend $2,000–$3,000 on inspections for properties they don't end up buying.
Strata Report (Units & Townhouses)
If you're buying a unit, apartment, or townhouse in a strata scheme, you need a strata inspection report. This reveals the financial health of the owners' corporation, any pending special levies, building defects, and insurance status. A poorly managed strata scheme can cost you thousands in unexpected levies after you buy.
Conveyancing / Legal Fees
A conveyancer or solicitor handles the legal side of your purchase: title searches, contract review, settlement, and fund transfers. Prices vary widely by state and complexity. Don't go with the cheapest option — a good conveyancer can save you from costly contract issues that a cheap one might miss.
The Big One: Government Costs
Stamp Duty (Transfer Duty)
This is usually the single biggest hidden cost. Stamp duty is a state government tax calculated as a percentage of the purchase price, and it can range from zero (if you qualify for a first home buyer exemption) to tens of thousands of dollars. Every state has different rates, thresholds, and concessions — so check your state revenue office before you start looking.
First Home Buyer concessions: Most states offer stamp duty concessions or exemptions for eligible first home buyers, but these have price caps. In NSW, for example, the exemption only applies to properties under $800,000 (as of 2026). Buy a property at $801,000 and you could owe thousands in stamp duty that you would have avoided at $799,000. Know your state's thresholds.
Mortgage Registration & Transfer Fees
These are government fees for registering the transfer of property ownership and your mortgage on the title. They're relatively small but often forgotten in budgeting.
Lender Costs
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the purchase price, most lenders will require you to pay LMI. This insurance protects the lender (not you) if you default on the loan. It's calculated based on your loan-to-value ratio and the loan amount — and it can be a massive cost. On a $700,000 property with a 10% deposit, LMI can exceed $15,000.
Watch out: LMI is often capitalised into your loan, meaning you don't pay it upfront but you pay interest on it for the life of your mortgage. On a 30-year loan, that $15,000 in LMI could end up costing you $25,000+ in total. The government's Home Guarantee Scheme can help eligible buyers avoid LMI altogether.
Loan Application & Valuation Fees
Some lenders charge application fees and require a property valuation at your cost. Many lenders have dropped these fees in competitive markets, but they can still appear — especially with smaller lenders or complex loan structures. Always ask your broker for a full fee breakdown before committing to a lender.
Settlement Day Adjustments
Council Rate Adjustments
If the seller has already paid council rates for a period that extends beyond settlement day, you'll need to reimburse them for the portion you'll benefit from. This is calculated at settlement and added to your costs.
Water Rate Adjustments
Same principle as council rates — you reimburse the seller for any pre-paid water charges that cover the period after settlement. These seem small individually but add up across all the adjustment items.
After You Get the Keys
Moving Costs
Professional removalists for a two-bedroom home typically cost $800–$2,000 depending on distance and volume. Add packing materials, cleaning fees for your old rental, and the inevitable takeaway meals during the chaos of moving week.
Immediate Repairs & Essentials
Almost every property needs something on day one: new locks, window coverings (curtains or blinds), a mower for the lawn, cleaning supplies, minor repairs that weren't worth fixing before settlement. Budget at least $3,000–$5,000 for immediate essentials, more if you're buying an older property.
Home & Contents Insurance
Your lender will require building insurance from the date of settlement (or sometimes from the date of exchange). Contents insurance is optional but strongly recommended. Premiums vary significantly by location, property type, and coverage level — properties in flood or bushfire zones can attract substantially higher premiums.
Typical Total Hidden Costs
On top of your purchase price, for a property in the $600,000–$900,000 range
How to Protect Yourself
The best defence against budget blowouts is preparation. Before you start attending open homes, add up every cost in this list for your specific state, price range, and deposit size. Build a spreadsheet with worst-case estimates and keep at least a $5,000 buffer on top of that.
Don't rely on the purchase price alone when setting your budget. If you have pre-approval for $800,000, your real budget for the property itself might be closer to $740,000–$760,000 once you account for all the costs above. Knowing this before you start looking saves you from falling in love with properties you can't actually afford.
Do your suburb research early. The more you know about actual sold prices, rental yields, and growth trends in your target suburbs, the less likely you are to overpay or chase properties in areas that don't stack up. BuyersMate suburb reports give you government-verified data on price trends, demographics, and more — so you can focus your limited budget on suburbs with strong fundamentals.
Know Your Suburb Before You Spend
Don't let hidden costs catch you off guard. Start with a free suburb report and make sure the fundamentals support your investment.
Get Your Free Suburb Report →