10 Hidden Costs When Buying A House In Queensland

Although hidden costs when buying a house can be unavoidable, if you are prepared and know what to expect – it can make the whole process much less stressful.


Madd Loans owner George Samios has been in the mortgage business for over twelve years, so it’s safe to say that he’s seen his fair share of unwanted surprises when it comes to hidden fees or costs involved when buying a home or property. He stresses the importance of buyers not to get caught out in regards to the “extras” that come with taking out a mortgage.

“When you buy property, you have some pretty obvious fees like stamp duty – but you’ve also got a number of other government fees like transfer registration fees. There’s so many hidden costs that clients may not be aware of, which can add up into the thousands of dollars very quickly.”

So, what exactly should first (or second, or third) home buyers be aware of when it comes to unexpected costs associated with taking out a mortgage or loan?

A Breakdown Of Hidden Costs When Buying A House

Let’s go through some of the major costs that most buyers aren’t aware of – or simply forget about – when buying a house.

Lenders Mortgage Insurance – If you haven’t saved the full 20% deposit for your home loan, then lenders mortgage insurance is required. This fee is compulsory and is designed to protect the banks if you default on the loan. Calculated on a sliding scale, an example of this is that if you were looking at a property at $500, 000 with a 10% deposit ($50, 000) – expect your LMI to be $8000. While this may seem like a lot, it also helps buyers with as little as 5% to get into the property market faster.

Stamp Duty – This one is non-negotiable and is a state government tax issued on property purchases. The good news is that you are a first home buyer and living in the property in Queensland. The bad news is that if this is your second or third home, expect to pay around $8750 on a $500,000 home in Brisbane. This dollar amount depends on the value of your property, so it can fluctuate.

Government Fees – Essentially, this is about registering with the Queensland Government. The three major ones include Registration On Mortgage ($187), Registration Of Discharge On Mortgage ($187), and Registration Of Transfer (Property Title) – which can range from a few hundred dollars, to a few thousand dollars depending on the value of your property.

Council And Water Rates – This will be calculated depending on where you live, with the rates in Brisbane ranging from $1200 to $2200 per annum. You may need to rebate or refund the existing property owner if they have already prepaid their rates, before organising your own payment system to the council when you take over ownership.

Body Corporate (Strata) Fees – If you are buying a unit, apartment or townhouse – or basically anything that isn’t a standalone residence – then you will need to pay body corporate fees. This is a fee generally paid quarterly, to cover gardening, electricity, cleaning, plumbing and building maintenance. These costs can add up very quickly, so make sure you get a copy of the strata reports before you purchase a property with a body corporate stipulation.

Legal Costs – You’re going to need the assistance of a solicitor, legal professional or conveyancer to make a strata report (if required), conduct title searches, or to review a contract of sale. The latter isn’t an essential requirement in Queensland as we have standardised terms and conditions, with the costs generally ranging between $1000 to $2000 depending on how complex the transaction is.

Legal Fees on Buying a House

Building And Pest Inspections – This is a big one. You need to protect yourself against any potential structural issues with the property that may be invisible from the outside, along with any hazardous pest or termite infestations. When combined, these usually are between $500-$700 in Queensland.

Insurance – Building insurance, property insurance, and contents insurance are necessary evils – but are designed to cover you should anything go pear shaped. In Queensland, you often need this before you sign the contract of sale, as you would assume responsibility of the property.

Removalist And Electricity Connection Costs – Even hiring a truck to move your things from one side of Brisbane to the other usually sets you back around $500. Interstate moves could easily go into the thousands of dollars, so make sure this isn’t a cost that you forget about (as a lot of people generally do). If your property doesn’t have an established power connection, this can also run into the thousands of dollars.

Bank Fees – Although you might have your application fee waived, there are also other costs to consider like evaluation fees, settlement fees, and legal fees that may be hidden in the fine print. Unlike Madd Loans, not all mortgage brokers offer a fee free service, so ensure you shop around for the best fit for your circumstances.

RealEstate.com.au estimates that when obtaining a mortgage for a $500, 000 property in Queensland, it’s not unreasonable to pay between $12, 000 to $25, 000 in fees on top of your interest rate. The key here is to make sure that you’re aware of the costs that come with any mortgage, to ensure that there’s no unexpected surprises.

If you’re considering taking the leap into the property market, speak to the professionals at Madd Loans to simplify the process – we pride ourselves on making mortgages fun.

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