If you’re house hunting the main numbers you probably think about are the house price and monthly mortgage payments. If they seem affordable then the property might be the one for you. But there’s more you need to consider which could considerably increase the cost of buying a home.
Here are the eight main costs you need to factor in before you can work out if you can afford to buy. Even if you don’t get charged the highest figure on each, you could easily be looking at an extra £2,000 to £4,000 on top of the deposit and Stamp Duty.
1. Stamp Duty
Stamp Duty is a government tax on properties over £125,001. This is going to be one of the biggest extra charges, and for most will total in the thousands of pounds.
How much you pay is tiered depending on the house price.
- 0% on the first £125,000
- 2% on the next £125,000
- 5% on the next £675,000
- 10% on the next £575,000
- 12% on anything more
If you are buying a second home then there’s an extra 3% on each band.
2. Mortgage fees
This fee has a few different names – arrangement fee, booking fee and mortgage fee are all common ones. This is the price you pay to the lender to have their mortgage. This can range between £99 and £2,000.
Low interest rates can sometimes come with higher fees, so work out the total cost of the mortgage to get a true comparison.
3. Valuation fees
Here the mortgage lender checks the property is really worth what you’re planning to spend. This is commonly between £150 to £1,500.
4. Survey fee
You also need to check everything is ok with the property. It’ll cost between £250 and £600. The more expensive the survey, the more thorough it’ll normally be, so it could be worth paying more to make sure there aren’t hidden problems waiting for you when you move in.
5. Legal Fees
Once you’ve got the mortgage and are buying the home you’ll have to pay your solicitor to process all the paperwork. Look at £850 to £1,500.
6. Local Searches
Another fee to your solicitor. Here they search for any issues such as planning permission. Plan for £250 to £300.
7. Transfer fee
You then have to pay for your money transferred. It’s generally £40 to £50.
8. Moving costs
On average plan for £300 to £600 to move all your possessions. This could of course be a lot more if you have a lot of furniture to transport.
The above article was originally published on the Money Advice Service blog on 20th September 2017
For further information take a look at our Introduction to Mortgages leaflet.