Property Buying Cost Calculator
How much will your property purchase cost you? You know you will need to put down a deposit. You understand loan repayments will be made monthly.
But what about the other costs involved in buying a home in Australia? Have you considered them? To add to your confusion, costs vary according to the state or territory you are buying in, as well as other factors.
When buying a property in Australia, you must consider the stamp duty payable as well as legal and conveyancing fees. You may need a building inspection and a pest inspection, in addition to paying a mortgage registration fee.
As an Australian expat who still possesses Aussie citizenship or permanent residency, you have no extra costs than a resident Australian.
However, as a foreign national purchasing a home in Australia, there are greater costs. Firstly, you need to apply for permission to buy Australian property from the Foreign Investment Review Board (FIRB). You will also need to pay a foreign stamp duty surcharge in addition to standard stamp duty.
The property purchase costs calculator tells you about all the expenses you need to bear when buying Aussie property.
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What Costs Are Involved When Buying a Home In Australia?
There are several costs involved in buying a home, including several upfront costs and government fees. Review our checklist of the expenses you need to factor into your property purchase:
- Deposit (typically 15-20% of property value)
- Stamp Duty
- Mortgage Registration Fee
- Conveyancing Fee
- Lender Fees
- Building Inspection Fee
- Pest Inspection Fee
- Legal Fees ($2,000-$4,000 average)
- Lenders Mortgage Insurance (if your deposit is under 20%)
- Foreign Stamp Duty Surcharge (for foreign buyers)
- FIRB Application Fee (for foreign buyers)
Additionally, Australian Expats will have extra relocation costs like flights and transporting belongings when moving back to Australia.
How Much Should I Budget For Property Buying Costs?
Buying property costs can total thousands of dollars. Here are the top costs for you to consider.
1. Deposit
The deposit is the largest property purchase cost. You typically need 15-20% of the property value. Your borrowing power calculation is instrumental in determining how much you can borrow and the value of a 20% deposit.
With a $600,000 home, a 20% deposit would be $120,000. Saving this much may take years, during which property values may rise.
You can pay a smaller deposit but may need to pay lenders mortgage insurance (LMI) and higher interest rates. Lenders mortgage insurance is an insurance fee that you will need to pay each month. It covers the risk that the lender perceives from your home loan application. You will usually need to pay this LMI cost until your equity in the home reaches 20% of the value.
2. Stamp Duty
After the deposit, stamp duty is the next largest cost. Use the stamp duty calculator to estimate the amount. Stamp duty varies based on property value, state/territory, and buyer status.
Being a first home buyer or investor also impacts the amount of stamp duty you need to pay. Some states allow stamp duty exemptions for first home buyers or heavy discounts. In addition, your status as an Australian citizen, permanent resident, or foreign buyer is important.
For example, let’s say you are a first home buyer purchasing an established home as your primary residence in Victoria. You will pay zero stamp duty. However, if you are not a first home buyer, you will pay $21,970 in stamp duty.
Stamp duty is usually payable between 30 days – 60 days after the settlement date. However, this varies according to the state or territory in which you are buying the property. Although, if you are buying in South Australia, you must pay stamp duty on the day you complete the sale.
Expats with Australian citizenship or permanent residency will not need to pay any additional costs. You are at no disadvantage to a resident Aussie.
3. Lenders Mortgage Insurance (LMI)
You may need to pay lenders mortgage insurance if your deposit is under 20% of the property value. Most homebuyers try to pay a high enough deposit to avoid paying LMI.
Some lenders may view Australian expats as a higher risk and require you to pay LMI, even if you have a high enough deposit. However, Odin Mortgage brokers are specialists in expat home loans and can negotiate with lenders to remove the need for LMI payments.
4. Foreign Buyers
If you are not an Australian citizen or permanent resident, but you want an Australian home loan, we can still help you. However, it is often a much more expensive process to buy property as a foreign buyer.
Foreign buyers without permanent residency pay extra costs:
- Foreign stamp duty surcharge of 5-8% depending on the state.
- FIRB application fee of several thousand dollars.
- No stamp duty exemptions or discounts.
For instance, on a $500,000 home, a foreign buyer in Victoria would pay $61,970 total stamp duty compared to $21,970 for a standard buyer. That is a significant cost to factor into your budget.
In addition, you will need to spend several thousand dollars on an application fee for the Foreign Investment Review Board. All foreign buyers must be permitted to buy a home in Australia, designed to create a fair property market for Aussie residents.
Whilst several thousand dollars may seem expensive, buying a home without permission may result in a fine of $3,300,000! You could also be at risk of up to ten years in prison.
5. Other Costs
Other costs involved in buying a property include conveyancing fees to transfer the property into your name. You will also need to pay legal fees, lender fees, registration fees, and a building and pest inspection.
Ongoing costs include mortgage repayments and insurance. Relocation expenses also apply to foreign buyers moving to Australia.
Foreign investors looking to purchase residential properties in Australia must obtain approval from the FIRB. The application process incurs fees, and compliance with the rules is vital to avoid legal complications.
Furthermore, your lender may ask you to pay a valuer fee to determine the worth of the property you are buying. Overall, these total to around $4,000-6,000.
You will also need to consider other expenses, such as mortgage repayments and home and contents insurance, when budgeting for your home loan. In addition to these, expats need to consider moving expenses and the total amount of relocating to Australia.
How Can I Easily Calculate Property Buying Costs?
Use the above property buying cost calculator and discover the total costs involved in buying your property. You will need to enter the following information, where applicable, into the calculator for a reliable result:
- Stamp duty total
- Mortgage registration fee
- Transfer fee
- Loan application fee
- Legal Fees
- Lender mortgage insurance
- Other costs
You will discover the total cost of buying your property and how to get your Australian home loan approved.
Access Other Calculators Like the Property Buying Cost Calculator
Odin Mortgage is the leader in securing home loan approval in Australia for Aussie expats, permanent residents, and foreign buyers living overseas. We understand the complexities of proving overseas income and the need to negotiate a great deal with lenders.
We are Australian Credit Licence holders, offering a free service to secure home loans matching your needs. You can check out our range of mortgage calculators online.
Get in touch with us today and find out how we can help you on your property buying journey.
Frequently Asked Questions
Will my property buying costs be higher with a low credit score?
Property buying costs are not dependent on your credit score and will not rise due to this factor. However, a good credit score for expats in Australia will open up a great set of interest rates and will save you money on your monthly repayments.
How does my credit score impact my home loan eligibility as an expat?
A strong credit score makes lenders more likely to approve your application and offer better interest rates. Check your credit and follow tips to improve it before applying.
Can I purchase an investment property in Australia from overseas?
Yes, Odin Mortgage can help you with your investment property purchase from overseas. You can check out the investment property calculator to discover the costs involved.
What is my borrowing power?
Your borrowing power is the amount you can borrow from a lender towards your property purchase price. Borrowing power is calculated by adding together all income streams and deducting all expenses and ongoing debts.
Use the borrowing power calculator to determine how much you can borrow.
What ongoing costs come with owning property in Australia?
Key ongoing costs are council rates, property insurance, maintenance and repairs, mortgage interest, strata fees (if applicable), utilities, and more. Budget approximately 1-3% of the property value annually.
Can Australian expats get a mortgage in Australia while living overseas?
Yes, Australian expats can apply for a mortgage in Australia while living overseas. However, each bank may have specific criteria and requirements, so it’s essential to research and choose a suitable lender.
What are council rates, and how often are they paid?
Council rates are fees paid by property owners to local councils for services and amenities provided. They are usually paid annually or semi-annually.
Do I need property insurance if I'm renting out my Australian property?
Yes, property insurance is essential for landlords as it provides coverage for potential damages and liabilities that may arise when renting out the property.
