Home-buying costs go beyond the initial deposit and monthly mortgage repayments; they also include things like mortgage fees, tax and the costs of moving and decorating.
Before you take out a mortgage, it’s important to make sure you’ve factored in all the fees involved in buying a home. They can vary widely, depending on the mortgage you choose and your personal circumstances.
This is the cash amount you put towards the cost of the property.
To be eligible for a mortgage, lenders normally need at least 5% of the property's purchase price. For example, if you're looking to buy a home valued at £200,000, you'd need a upfront deposit of at least £10,000. But the bigger the deposit, the better the rates, with the best rates reserved for those with a 40% deposit or more.
In most cases, a bigger deposit gives you access to the best mortgage rates. So it's worth considering how big a deposit you can give when buying a home.
This is a property tax you usually have to pay in England and Northern Ireland if you buy a home. In Scotland, stamp duty is called Land and Building Transaction Tax (LBTT) and in Wales it's called the Land Transaction Tax (LTT).
If you're a first-time buyer, you don't have to pay stamp duty in England and Northern Ireland on properties costing up to £425,000. If you're buying a second home in England or Northern Ireland, there is a surcharge of 3% of the property price for home's worth over £40,000.
The amount of stamp duty you need to pay for in Scotland and Wales varies, as different UK nations have different rates. Find out more using our stamp duty calculator.
You'll need to pay for a conveyancer to sort out the legal side of buying a home.
How much you need to pay depends on the value of the property and whether it's a freehold or leasehold. According to Property Solvers' the average conveyancing fees in 2023 for a freehold property is around £1,184.21.
The legal fees are what the conveyancing solicitor charges for carrying out the work of managing the purchase of the property.
The conveyancing fee also includes disbursement expenses, which include the handling of local searches so they can flag any issues of the area (such as risk of flooding), and the deeds to your home.
When buying a new home, your mortgage lender will want to conduct a house valuation to check you're paying roughly what it's valued for.
Some lenders don't charge a valuation fee as it's included in the mortgage deal with them. But for those that do, fees can cost upwards of £300.
A mortgage arrangement fee, also known as a completion fee, is a fee charged by some mortgage lenders for setting up your mortgage.
The cost varies depending on the type of mortgage, loan amount and rate of interest you'll pay, but you can expect to pay on around £1,000 on average.
An arrangement fee can be paid upfront, or added onto your mortgage. Choosing to add the arrangement fee to your mortgage can be useful if you don't have much cash left during the home buying process. But remember that you'll then have to pay interest on top of it.
Congratulations, you've completed the costs of buying your new home! Now that you're a home owner, it's important to keep on top of these ongoing expenses.
The cost of your council tax varies depending on:
the valuation band for your home
how much your local council charges for that band
whether you're eligible for a discount
You can check online to see how much council tax you have to pay.
How much you pay towards your mortgage each month depends on the size of your deposit, how much you’ve borrowed, the interest rate and the length of the term. It's worth bearing all this in mind when deciding on the size of your mortgage.
If you choose a variable rate mortgage, it’s important to be prepared in case higher interest rates push up your monthly repayments.
If you live in a flat, you might face maintenance and services charges. These can run into thousands of pounds a year.
General maintenance on your home will cost money. For example, replacing an old boiler or repairing some brick work.
Your home buyer survey should also highlight what areas need fixed sooner.
These include your utilities, as well as your phone, TV subscriptions and broadband.
You can compare internet providers with our broadband postcode checker.
Don't forget to also consider buying home insurance to protect your building and contents should the worst happen.
The costs involved in buying a house mainly depend on:
the value of the home you're looking to buy
whether the property is a freehold or leasehold
For your monthly mortgage repayments, interest rates affect how much you'll pay. A period of high-interest rates increases the cost of mortgage payments if you're on a variable rate mortgage.
Stay on top of mortgage trends and see what today's UK mortgages rates are.
It's important to compare mortgages across the whole market to get a competitive rate to determine your monthly payments.
Compare mortgages with our broker partner Mojo to find the best mortgage rates for you.
Renting is suitable if you're looking for flexibility, but in terms of monthly costs buying will ultimately be the cheaper option.
There are pros and cons to renting or buying, the right decision largely depends on your personal circumstances. If you choose to buy, make sure you have enough to pay for the costs involved in buying a house.