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The Cost of Buying a Home Explained

We all know we need to provide a deposit for a mortgage but, how much does it actually cost to buy a home and what fees are involved? Read on for our handy guide to the costs associated with buying a home.

Deposits and Mortgage Arrangement Fees

A deposit is typically 5 – 10% of the purchase price and is the biggest cost involved in buying a property. The bigger deposit you put down against your mortgage, the lower your monthly mortgage payment will be. A mortgage arrangement fee is what your lender charges for arranging your mortgage and while some lenders include this in with the overall mortgage cost, adding this on to your mortgage can create additional interest on your mortgage payments.

Valuations

Before a lender can provide you with the funds to buy a property, they will request that the property is professionally valued. Lenders will arrange for a mortgage valuation to be carried out on the property and include the fee with the mortgage. For peace of mind, you may wish to arrange your own private survey which can range anywhere between £150 – £800.

Stamp Duty

Stamp duty is a tax added on to the purchase price of a property and currently stands at between 0 – 12% of the property price. The higher the price of the property, the higher the stamp duty will be. Stamp duty has certain conditions and if the home you want to buy is below £125,000, you will be exempt from this tax. First time buyers are also exempt up to £300,000. *Please note that over the last 12-18 months, there have been a number of incentives by the Government in relation to the stamp duty levy tax paid for purchasers.

Here are the current Stamp Duty levels (as of October 2021)

£0-£125,000 = 0%
£125,001-£250,000 = 2%
£250,001-£925,000 = 5%
£925,001-£1,500,000 = 10%
£1,500,001+ = 12%

You can also use the Government’s SDLT online calculator here.

Service Costs

There are a number of people who need to be legally involved in the sale of a property and a solicitor is one of them. You should expect to pay a property solicitor or conveyancer anywhere up to £2000 for their involvement of your property purchase which includes transferring the property deeds from the previous owner to the new one.

Furniture and Moving Day

One of the smaller costs of buying a property and also one of the most important is furnishing your new home and moving your belongings in to it. Removal companies can charge as little as a few hundred pounds or up to £1000+ depending on how much you need moved and how far. Another likely cost is new furniture, especially if you are purchasing a bigger home than the one you are currently living in.

We wish you all the best with your property purchase and if you need help with buying a property or working out the fees involved then talk to us. We can advise you on every aspect of buying or selling a property.

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