3.4 Additional costs of buying a home
Apart from a deposit, homebuyers need to budget for a range of other upfront costs. The largest are usually any purchase taxes (such as Stamp Duty in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland, Land Transactions Tax in Wales and similar taxes in other countries), and valuation and legal fees. There may also be a fee for arranging a mortgage that can either be paid upfront or added to the loan.
Taken together, these additional costs can be substantial – for example, equivalent to another 5 to 15% of the value of the property, so must be estimated and planned for.
Having made the purchase, the main ongoing cost is the mortgage payments. However, the lender will also insist that the building is insured, since the mortgage is secured against the property.