The Hidden Costs of Home Ownership

So you’ve saved up a deposit and you’re ready to start your search for a new home. It’s an exciting time. You’re making the transition to true freedom and are getting ready to commit to the single largest purchase that you’re likely to make in your life.

However, many first-time homebuyers go through this process unprepared for taking on the true costs of home ownership. It’s much more than your monthly mortgage repayment. There are a few other costs that you have to keep in mind.

Stamp Duty

The value of the property you buy determines whether you’ll pay any stamp duty. First-time buyers are exempt up to a value of £300,000, whereas other buyers have to pay on any property worth over £125,000.

Stamp duty also applies at different rates, depending on both the property’s value and what you’re buying the property for. It could be as low as 2% of the property’s value if you’re buying the property to live in, up to 15% if you’re buying a property worth over £1.5 million to rent out.

Whatever the case may be, it’s going to cost you thousands of pounds on top of your mortgage. Some lenders may allow you to capitalise your stamp duty onto your mortgage, though this is fairly rare. Usually, you’ll have to come up with the extra money on top of the deposit that you pay.

Valuation Fees

Most lenders look to make money in ways other than your mortgage repayments, which leads us to the valuation fee. This is a fee, usually between £150 and £1,500, that you’ll pay to the lender to assign a value to your property. This also determines how much you can borrow.

Some lenders waive these valuation fees, especially if you’re able to provide a large deposit. Generally, you’ll pay higher valuation fees if you offer a small deposit. However, it’s important to check several lenders as each has its own policy when it comes to valuation fees.

Insurance Packages

Everybody knows that they need building and contents insurance when they buy a new home. However, you may also want to consider repayment insurance and a mortgage indemnity guarantee.

Furthermore, it might be worth taking out a life insurance policy that’s to the value of your mortgage. Plus, your property’s location may also affect how much you pay for car insurance.


Buying a property is a legal transaction, which means you need to bring a solicitor on board to handle all of the details. Conveyancers are the professionals for this job, and they’ll handle all of the paperwork, such as the transferral of the property’s title into your name.

But those services don’t come cheap. You’ll usually pay between £800 and £1,500, depending on the property’s value. The purchase having extra conditions attached can also raise the amount of money that you’ll pay to a conveyancer.

You can handle the conveyancing duties yourself. However, with no experience, you’re prone to making mistakes that could prove more costly than hiring a conveyancer.

At Hills Estate, we want you to be ready for all of the challenges that home ownership brings. Contact us today to get help in finding the property of your dreams.