The true cost of buying a house

Do you know the actual cost of buying a house? Whether you’ve purchased a property before or this is your very first one, it’s important to have a clear understanding of the costs and what they might mean for your overall budget.

There are a number of upfront expenses and also regular ongoing costs that you’ll need to factor into your budget. Some you’ll be able to shop around for on comparison sites and others are pretty much set in stone. Here’s a breakdown of what you’ll need to budget for when you’re ready to make this big purchase.

Upfront costs to consider

Stamp duty – this is often one of the biggest additional costs by far. However, if you manage to buy before 31st March, you’ll save on this thanks to the stamp duty holiday. Under this initiative, when buying your main home in England and Northern Ireland, properties worth up to £500,000 are exempt from paying stamp duty. Now is a great time to buy a house and save money!

Deposit – to buy pretty much any property, you’ll need a deposit. This will be at least 5% of the value of the property. For example, if you’re buying a £200,000 house, your deposit could be anywhere between £10,000 and £40,000.

Legal fees – these include things such as conveyancing, which is undertaken by your solicitor. What you pay your solicitor will consist of their legal fees as well as things like local searches and registering change of ownership with Land Registry. It’s important to have these budgeted into your overall cost or look at other ways of financing if you haven’t accounted for them.

Surveyor fees – it is highly recommended you get a survey on the property you’re buying, no matter how young or old it is. Varying in price from £400 to well over £1000 depending on what type of survey you have, it will give you reassurance that your future home is in a good condition, or flag any issues that need to be rectified before the sale goes through.

Mortgage broker fees – not necessary but sometimes beneficial, enlisting the services of a mortgage broker can ensure you’re getting the best mortgage deal possible!

Your regular monthly costs

Mortgage – this is the monthly amount you pay back your lender over a set term agreed with them.

Home insurance – buildings and contents insurance are often required by your mortgage lender anyway, but this is a worthwhile monthly cost to protect your home and what’s inside it.

Council tax – this is a cost that must be paid and can range from a couple of hundred pounds a year to several thousand. It all depends on the size of the property and the council that it sits in.

Running costs – these tend to include your water, gas and electricity bills, as well as things like your TV licence. These can often be expensive so it’s worth getting a comparison from

different companies, as well as seeing if you can make the property more energy efficient to reduce your monthly bills.

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