Costs of buying a house in VIC (2024 edition)

Are you considering purchasing a home in Victoria and would like to be aware of all the expenses?

Budgeting for more than just the down payment and purchase price is essential, so find out what you can afford by investigating all possible expenses.

This post is exclusively focused on what to anticipate when buying a house in Victoria; we have a general guide about the hidden costs of property purchases.

We also have guidelines covering Queensland and New South Wales if you're buying a home there.

First, let's explore the up-front expenses associated with purchasing a house in Victoria.

Upfront costs of buying a house in VIC

When we talk about upfront costs, we’re largely referring to items that you must pay, such as government taxes, legal fees, and charges by your home loan provider. In Victoria, these include:

Victorian stamp duty costs

Any transaction involving property or land is subject to stamp or land transfer duty, which is a tax due to the state. It is computed on a sliding scale and is based on the value of the attribute. on instance, in Victoria, stamp duty would be $44,570 on a $825,000 house.

In Victoria, first-time homebuyers who meet certain requirements can also take advantage of stamp duty savings. For example, if you're buying a property for $600,000 or less, you waive stamp duty.

There is a concession amount based on a sliding scale if you are buying a property worth between $600,001 and $750,000.

In Victoria, stamp duty on a $825,000 property would be $44,570.Stamp duty concessions are not available to first-time homebuyers who purchase houses valued over $750,000 in the state.

Lenders Mortgage Insurance (LMI)

The majority of lenders favour having a deposit of at least 20% of the property's worth. This reassures them that you are a somewhat low-risk consumer and that you can make savings. You might have to pay lenders mortgage insurance (LMI) in order to be eligible for a loan if you don't have this kind of deposit. Usually, this amount is included in your monthly installments instead of being due all at once. Nonetheless, you might be able to qualify for certain options that require less than a 20% down payment.

For instance, in Victoria, you will pay $31,780 LMI on a $700,000 house.

Conveyancing fees in Victoria

Given the specialised skills needed to draft contracts of sale, examine them, and process all the relevant papers, legal expenses are essentially inevitable when buying a property. The cost of legal representation while purchasing a home in Melbourne or Victoria can vary from $800 to $2,200, contingent upon the property's worth and the complexity of the transaction. Conveyancers frequently offer somewhat lower prices than hiring a lawyer. The cost of disbursements, which are extra costs your legal team may have during the buying process such as registering your title and attending settlement, should also be budgeted for individually.

In Melbourne and Victoria, the cost of a lawyer's services for a home purchase can vary from $800 to $2,200.

Building and pest inspection costs

Make sure a property is pest-free and structurally sound before purchasing it, especially if termites are an issue. This kind of property study can be completed by a licenced professional building inspector, who will usually provide a report outlining their findings.

Building and pest inspection costs in Melbourne vary depending on the size of the property:

• $380 +GST for a 1-2 bedroom unit or townhouse.
• $410 +GST for a 3+ bedroom townhouse or house.
• $400 +GST for a combined pre-purchase building and pest inspection (unit)
• $430 +GST for a combined pre-purchase building and pest inspection (home)

Mortgage application fee

A mortgage or house loan application fee is levied by certain lenders in order to process your application and any associated documentation. Some organisations offer to waive this cost in exchange for new members. If not, they should prepare to spend about $150 in Victoria for this.

Valuation fee

The property you wish to buy will be expertly valued by your home loan provider. The main reason for this is so they can compute the total amount of your house loan precisely. Depending on the property's size, a property appraisal in Melbourne, Victoria, should cost about $200. Make cautious to verify as some lenders may bundle this price with the application fee for a mortgage.

Registration of title

It is necessary that you register your mortgage against the property's title. This establishes your ownership of the property and makes it viewable in a title search. In Victoria, this cost has been $119 since July 2019.

In Victoria, you'll need to pay $119 to register your mortgage.

Home and contents insurance costs

Canstar reports that the average cost of house and contents insurance in Victoria is $1,433. When seen separately, this includes $1,177 for your home and $395 for your belongings in the event that they are damaged or stolen. This amount is based on a standalone, three-bedroom house. It should be noted that you do not need to obtain your own building insurance if you live in an apartment complex with a strata title.

Understand the ongoing costs after buying a home

Remember to factor in all of your recurring expenses, such as utilities, home loan payments, and any remodelling or repairs that may be necessary. Since your monthly house loan payment is probably the largest expense you have, let's start there. Based on your home loan amount, interest rate, and loan term or length, you can use a mortgage repayment calculator to estimate how much these will be.

You can use a mortgage repayment calculator to get an idea of how much these will be.

With a $600,000 house loan and a 2.42 percent interest rate spread over 30 years, your monthly payments in Victoria would come to about $2,356.

If your new house needs renovations, you'll need to set aside money for those expenses. From a few thousand dollars for a minor makeover to tens of thousands for a significant kitchen or bathroom renovation, this might be reasonably priced. You might discover after moving into your new house that it requires minor upkeep and repairs, such as painting, mending fences, or changing a few roof tiles. These kinds of tasks probably won't cost more than a few thousand dollars.

Your monthly home loan payments are likely to be your most significant outgoing.‍

The total cost of all your utilities, such as your internet, water, and power bills on a monthly or quarterly basis, can also mount up. An typical family house in Victoria would pay $1,392 for power, according to analysis by Canstar Blue. They discovered that the average quarterly water rate in Melbourne is $247, and the monthly cost of a mid-tier NBN connection is approximately $70. You ought to have a better understanding of all the expenses related to purchasing real estate in Victoria after reading this.

Now that you've listed them all, you can calculate the type of property you can actually afford.