When you plan to purchase a home or an investment property there are bank and government fees that you need to budget for.
The following costs are indicative when considering financing a new property. To note that fees and charges may vary depending on the State or Territory that you purchase into. Please refer to our Borrowing Costs Calculator for a cost summary.
Bank Fees:
When submitting a loan application there are usually bank establishment fees and settlement fees that need to be paid. The fees usually cover:
- Processing and assessing your loan application
- Property valuation
- Preparation of legal documents
Some banking home loan products also incur a monthly account keeping fee.
Other home loan packages incur an annual package facility fee.
Government Fees:
Purchasing a property will always incur statutory charges. These charges are not banking fees and are charged by the respective offices of states and territories of revenue. Please refer to our Offices of State Revenue quick reference guide for further information
Such costs may include Stamp Duty on the mortgage, Stamp Duty on the transfer of land and transfer of land registration fee. Also property title searches fees will need to be paid. Your solicitor or banking officer may explain these in more detail.
Lenders Mortgage Insurance:
Lenders Mortgage Insurance is only payable if your loan amount is greater than 80 per cent of the purchase price or the valuation of the property which ever is the lesser. Please refer to our Lenders Mortgage Insurance Calculator for an estimate of the insurance premium.
Conveyancing /Solicitor Costs:
Legal representation is always important when purchasing a property. These costs relate to you employing the services of a solicitor or conveyancer. They will look at your:
- Property Contract of Sale - advice on special conditions if any. Investigate Caveats or covenants attached to the property and provide general advice on the transfer of title process. You should never sign a contract unless first discussing the terms and conditions with a legal representative.
- Provide general advice on the bank mortgage documentation and communicate with the bank's legal agents to ensure that settlement of your property will proceed without any problems.
- Arrange all necessary searches of the property and ordering building reports to ensure that all is in compliance with local council
Building Insurance Cover:
The property that you are offering as security to the bank must be insured by a home building insurance policy with the name of the bank to be noted as having interest in the property. You may use any insurance company of your choice.
