When you’re trying to work out how much you need to save for your deposit, don’t forget to factor in upfront costs and fees, including:
Stamp duty
Stamp duty is a state government tax on property purchases and title transfers. It’s calculated as a percentage of the property’s value, ranging from 3-5%. Stamp duty rates vary depending on:
- Your state or territory
- Whether you’re a first-home buyer
- Whether you’re buying vacant land
- Whether you’re buying an investment property
- The price of the property
Use our stamp duty calculator to estimate your costs. Stamp duty concessions or exemptions apply to eligible first-home buyers in most states.
Mortgage registration fees
Your state or territory government will charge you mortgage registration fees to register your mortgage on a property title. This registers your property as the security on the home loan, allowing future buyers or lenders to check any claims on the home. Mortgage registration fees are payable when the loan is established.
Legal & conveyancing fees
When you buy a home, you’ll usually need to engage a conveyancer or solicitor to handle all the legal paperwork and processes, like transferring the property title to your name, etc. Conveyancing fees can range between $1,200 and $2,400.
Building and pest inspection
It’s always best to conduct a building and pest inspection before you sign the contract to buy your home. This final check (although not mandatory) ensures that the property is structurally sound and has no pest problems like a termite infestation. Building and pest inspections combined can cost between $200 and $1,000, depending on the size of the property and your location.
Moving costs
If you’re buying a home to live in, you may have to hire a removalist which could cost upwards of $1,000 for the service, depending on how much furniture you have, mileage, and if you require additional boxing and wrapping. It’s a good idea to compare quotes from different companies and read online reviews before you hire professionals.
You may be required to take out home insurance as a condition of your home loan agreement. Home insurance is designed to cover the costs of repairing or rebuilding your house if it’s destroyed or damaged by an insured event (e.g. fire, flood, vandalism, etc.). Home insurance can cost between $100 and $300, depending on your level of cover and insurer.
Depending on the local rules in your state and your sale contract, you might become liable for insuring the property before the sale is settled and you actually move in. For example, in Queensland the buyer becomes responsible for the property from 5pm on the day after the contract date.
FAQs
That cost depends on numerous factors like inflation and real estate trends. According to the Census, homes sold for a median price of $420,700 in January 2024. Thankfully, you don't need to pay off that amount all at once. A down payment that's 20% to 25% of a home's value can help you secure a property.
How to save up for a house in 2024? ›
These tips will help you get ready to afford a wonderful property you can live and thrive in for years to come.
- Set your savings goals. ...
- Budget, budget, budget (but make it easy) ...
- Save windfalls of cash. ...
- Take on a side hustle. ...
- Cut down on costs. ...
- Go easy on the credit card. ...
- Save money with a home inspector.
Most buyers will want to make a deposit that's at least 5% of the purchase price, as it tells the seller your finances are in order. The higher the deposit, the more attractive your offer for the home is. In general, the deposit amount is guided by the purchase price as well as how quickly you'll be closing the deal.
How big of a down payment for a house? ›
Further, putting 20% down on your home when you purchase can help show the bank — and yourself — that you're financially ready to purchase a house. A down payment on a house also protects you as the buyer. If you want to sell your home and the market drops, you might owe more on your property than it's worth.
Is 50K enough to buy a house? ›
You can generally afford a home for between $180,000 and $250,000 (perhaps nearly $300,000) on a $50K salary. But your specific home buying budget will depend on your credit score, debt-to-income ratio, and down payment size.
Is 2024 a good time to buy a house? ›
Yes. This is the best time to buy a house in California. With the current trend in the CA housing market, you'll find better deals on your dream home during Q2 2024. As per Fannie Mae, mortgage rates may drop more in Q2 of 2024 due to economic changes, inflation, and central bank policy adjustments.
Is the housing market going to recession in 2024? ›
That being said, there are still far more buyers than sellers even with this negative first-time homebuyer news, meaning that there will not be a market crash likely. According to MCT housing market experts and other experts in the field, the likelihood of a real estate housing market crash in 2024 is low.
What is the minimum deposit you can put on a house? ›
What is the minimum deposit for a mortgage? The minimum deposit you need for a Nationwide mortgage is 5% of the property price, which would be a 95% mortgage. Eligibility criteria applies.
How much do sellers usually come down on a house? ›
The amount you may want to reduce your home's asking price depends on many factors, including the median price in your area, what comparable homes nearby are selling for and the length of time the home has been on the market. According to a Zillow study, the average price cut is 2.9 percent of the list price.
How much is a downpayment on a 500k house? ›
Conforming loan down payments can vary from 3% to 20% or more, so for a $500,000 home, you'd need between $15,000 and $100,000. Conforming loans, once again, follow Fannie Mae and Freddie Mac guidelines and usually offer competitive terms.
“Well, $3,000 is not enough for a down payment on most houses,” says Jill Gonzalez, an analyst with WalletHub. “The lowest percentage of down payment required is 3.5% for an FHA loan. So $3,000 would be enough for an approximately $85,000 loan, although that's way below today's median home price.”
What credit score is needed to buy a house? ›
The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).
Is $10000 enough for a down payment on a house? ›
It sure is. There are loan programs requiring as little as 3% down. Your choices are considerably broader with $100,000 available. $100,000 could conceivably get you into a home priced close to $1 million if you have enough income to qualify.
How much house can I afford if I make $36,000 a year? ›
On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.
Can I buy a house making 40K a year? ›
Using the 28/36 rule to calculate your home purchase budget
A mortgage might be good debt, but it's still debt and must be treated as such for budgeting purposes. If we're following the 28/36 rule, your mortgage payment with a 40K salary tops out at $933 each month, and your other debts are capped at $267.
How can the average person afford a house? ›
Now, Americans must earn roughly $106,500 in order to comfortably afford a typical home, a significant increase from the $59,000 annual household income that put homeownership within reach for families in 2020, according to new research from digital real estate company Zillow.
Will 2026 be a good year to buy a house? ›
However, increases should slow between 2024 and 2026, and rates may even decline in 2027. Among the factors that could impact mortgage rates in the next 5 years are inflation, Federal Reserve policy, and economic growth. Homebuyers should consider locking in a low mortgage rate now, as rates are expected to rise soon.”
Will house interest rates go down in 2024? ›
But until the Fed sees evidence of slowing economic growth, interest rates will stay higher for longer. The 30-year fixed mortgage rate is expected to fall to the mid-6% range through the end of 2024, potentially dipping into high-5% territory by the end of 2025.
How long does it realistically take to save for a house? ›
Many factors go into deciding how much to put down on a home. First, figure out what percentage of your dream home's price tag you want to put down. One report from Zillow in 2023 said it can take up to 11 years for the typical homebuyer to save up for a 20% downpayment!
How much money should I have saved for a house? ›
How much should you save for a home? It's a good idea to put away anywhere from 25% to 30% of your home's purchase price to account for your down payment, closing costs and other assorted expenses. Aiming to save 25% should cover the bare minimum – a 20% down payment, plus 5% in closing costs.
