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How much will buying a home cost me?

August 17, 2020
Information published was correct at the time of writing


There are few things more satisfying than buying your first home.

However, with banks, solicitors, the Government and surveyors involved, there are additional costs you’ll have to bear in mind before you embark on the property-buying journey. In addition, while no one likes to pay extra bills, if you have a good idea of how much your costs will be before you start, you can budget accordingly.

Mortgage fee

When you  take out a mortgage, there’s a good chance your lender will charge an ‘arrangement fee’. Prices vary but lenders will often disguise a higher interest rate with a low fee, so look carefully into this. You can pay the fee upfront or add it to your mortgage but bear in mind it will accrue interest with the rest of the loan over time if added to the loan. If you pay up-front you could lose this if this if the mortgage doesn’t complete for any reason.  Therefore, it may be worth adding this fee to the loan and then paying it off after completion (with many mortgages you can usually make overpayments up to 10% of the loan amount, each year, without incurring penalties – we can confirm this for you when we recommend the most suitable mortgage product available for you).

You may also be asked to pay a ‘booking fee’,  which is not able to be added to the loan and is non-refundable.

What could it cost?

Arrangement fee: £0-£2,500; Booking fee: £100-£250

Stamp Duty

When you buy a property in England or Northern Ireland you’ll have to pay HM Revenue & Customs ‘Stamp Duty Land Tax’ – a tax based on the cost of your new home (in Scotland, this is called Land and Buildings Transaction Tax (LBTT), and in Wales, Land Transaction Tax (LTT)). As of September 23rd, 2022, all purchases will benefit from a zero-rate bracket that is twice as high as before – 0% for the first £1-£250,000 of the purchase price (the previous bracket was £1-£125,000) and First Time Buyers will now also benefit from a Stamp Duty cut of 0% on purchases up to £425,000 – and you’ll have to pay it within 14 days of exchanging contracts. Make sure you bear this in mind when working out how much you want to borrow.
What could it cost? Depends on the value of your property – for more information visit: https://www.gov.uk/stamp-duty-land-tax

Valuation fee

Before agreeing to the mortgage, your lender will conduct a valuation of your new home. This is to gauge whether the property is priced at the correct market value, which covers them if they repossess your home and need to sell it. Some lenders won’t charge for this, but others will so check with us if you need to pay and if so how much to reserve for this. Note: in Scotland, the seller has to provide a ‘Home Report’ which will be included in the valuation.

What could it cost? £150-£1,500 (depending on the value of the property)

Surveyor’s fee

Before you make what will probably be the biggest financial commitment of your life, you should get your new property assessed by a professional surveyor. This is so you can see whether there are structural faults, plumbing/wiring issues or problems with damp. Armed with this knowledge you can make an informed decision about whether you think the property is fairly priced or not, or whether you want to move in at all. You can arrange a survey privately or through your lender. If you come across any major problems, you may want to carry out a full structural survey and this will take a comprehensive look at the structure of the property you are considering buying and indicate what work would be required to rectify any issues.

What could it cost? £250-£700 (more if you need a structural survey)

Legal fees

The legal process around buying a home is called ‘conveyancing’. You will need a solicitor to make sure everything – exchanging contracts, drawing down the loan, paying Stamp Duty – goes through and is above board. A conveyancer will also do local searches, which will check whether there are any local plans or problems. If you don’t know a solicitor, Charles Cameron & Associates will be able to put you in touch with one of our trusted legal professionals.

What could it cost? £850-£1,500 fees plus £250-£300 for local searches

We can help you plan your budget and keep you updated on lender and Government changes which could affect budgeting plans – such as the current Stamp Duty cut, which will be in place until March 2021. Don’t wait until you think you are ready – let us support you on your journey to home ownership – Talk to one of our independent advisers today.

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