The True Cost of Buying a Home

When you’re buying a property or moving house, there are a number of things you need to take into consideration. It isn’t just about saving up enough to put down a deposit. There are lots of other things that you’ll need to fork out for too. Take a look at the following information and think about whether you can really afford to buy a house:


First of all, if you have a leasehold property you’ll be required to pay ground rent. This can be up to £100 per year.

Continuous Costs

The continuous costs are important expenses when buying a home. Many people don’t consider these as they should:

  • Running the house – this is utilities such as gas, water and electric. You’ll also probably have the internet, a TV, and other things that will bump your bills up.
  • Council tax – this depends on where you live and what the property is valued as.
  • Insurance – there are all different kinds of home insurance. Yours will depend on the value of your home, likelihood of something going wrong, and value of your contents. Make sure you’re adequately covered.
  • Maintenance – you’ll definitely need to spend a few grand on problems that arise at some point or another. The average new homeowner pays £5,750 after moving in.

Your Mortgage

It’s important that you understand your mortgage properly, but there are a ton of different kinds out there for you to choose from. Mortgage fees include:

  • A booking fee of up to £250.
  • An arrangement fee, which can be a maximum of £2000.
  • A mortgage valuation fee, usually costing £150.

Try to pay these fees straight away rather than being tempted to add them on to your mortgage. Adding the fees to your mortgage means that you’ll pay interest on them, as well as the cost of the house!

Large Upfront Costs

We saved the best till last. The big upfront costs that you need to consider!

  • Deposit – you may need around 20% of your home’s value before you can move in and start paying monthly. The larger the deposit you have, the less you’ll pay each month. You’ll also have a lower interest rate. There are a ton more tips on deposits online.
  • Stamp duty – if you buy a home costing more than £125,000, you’ll need to pay stamp duty on it. This is 1% of the price you paid for the house, or more.
  • Valuation fee – sometimes this will be included in your mortgage fees, other times you’ll need to pay it separately. Make sure you find out as it can be up to £1,500.
  • Surveyor’s fee – all houses need to be checked by a licensed surveyor before you purchase. This can be up to £600.
  • Solicitors – a solicitor is needed to do all of the legal bits and checks on your new home. This is typically £1,500.
  • Sending money from lender to solicitor – up to £50. Usually called an electronic transfer fee.
  • Removal fees – this can be up to £600, but you can do it yourself if you have the patience.

After taking all of that into account, can you afford the true cost of buying a home?