A breakdown of costs involved in buying your first home (including ones you might forget!)

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Buying your first home is an exciting milestone, but it's important to understand that the house price isn't the only cost you'll need to budget for. 

From your deposit and solicitor fees, to surveys and moving costs, there can be a number of expenses along the way, and knowing what to expect can help you plan ahead and avoid any surprises.

As part of the Building Societies Association's First Time Buyer campaign, we've put together a guide to some of the key costs involved in buying your first home.

Your deposit is typically the largest upfront cost when buying a home. The minimum deposit you'll need will depend on the mortgage product you choose and your individual circumstances. 

Before booking viewings, try to have at least a 5% deposit. For example, if you're looking at a £200,000 home, you'll need a minimum deposit of £10,000. Even a small increase in your deposit can make a noticeable difference. For instance, moving from a 5% to a 10% deposit can reduce your monthly payments.

Looking for somewhere to keep your deposit growing? Check out our Home Saver account. 

Some mortgages come with an arrangement or product fee. In some cases, fees can be added to your mortgage, so if your application doesn't go ahead, and the fees are refundable, you won't be out of pocket. 

Common mortgage fees

  • Application/Arrangement Fee: charged by some lenders to process your mortgage application and set up your account. This fee is often refundable if the mortgage doesn’t complete and can usually be added to your mortgage.

  • Booking or Reservation Fee: A separate fee to secure a specific mortgage deal (e.g. a fixed-rate) may be required depending on the mortgage product. This is always paid upfront and is non-refundable. Some lenders include this in the arrangement fee. 

  • Valuation Fee: Covers the cost of a basic property valuation to ensure it’s suitable security for your mortgage loan. The fee is based on the property’s value. While this valuation is primarily for the lender, you’ll usually receive a copy. Some mortgage deals include a free valuation, but more detailed reports may incur extra charges.

A home survey is optional, but can highlight issues with a property before you exchange contracts, potentially saving you less money and stress later on.

There are different levels of home buyer surveys and costs vary depending on the type and age of property and survey type.

You'll need a solicitor to carry out the legal work involved in your purchase.

Their role includes:

  • Handling contracts.

  • Carrying out property searches.

  • Managing funds.

  • Liaising with the seller's solicitor.

  • Registering ownership with the Land Registry.

Solicitor fees vary depending on the property and complexity of the purchase. It's always worth getting a quote upfront so you understand exactly what's included. 

Stamp Duty Land Tax (SDLT) applies to property purchases in England and Northern Ireland above certain prices. 

As a first-time buyer, you may not have to pay Stamp Duty costs. Currently:

  • You pay 0% Stamp Duty on the first £300,000.

  • You pay 5% on the portion between £300,001 and £500,000.

  • Properties purchased for more than £500,000 are not eligible for first-time buyer relief. 

See the gov.uk website to calculate how much you'll need to pay. 

Depending on how much you own and how far you're moving, you may choose to hire a removals company, rent a van, put larger items in storage, or move your belongings yourself. It's worth getting some quotes from different removals or storage companies early on so you can factor this into your cost of moving budget. 

Life insurance

You're not legally required to take out life insurance when you get a mortgage but it may be something you wish to consider with the help of professional advice. 

Buildings insurance

Most mortgage lenders require you to have buildings insurance in place from the point you exchange. The covers the structure of your home against risks such as fire or flooding. You may also wish to consider contents insurance to protect your belongings. 

This is currently one of the most commonly forgotten expenses! Once you've moved in, you'll need to budget for:

  • Furniture.

  • White goods.

  • Decorating.

  • Household essentials.

  • Utility set-up costs.

Even if the property is move-in ready, there can be unexpected expenses during the first few months of homeownership as you get settled in.

Remember that your monthly mortgage payment isn't the only ongoing costs of owning a home. You'll also need to budget for:

  • Countil Tax.

  • Energy, water and electricity bills.

  • WiFi and TV services.

  • Home maintenance and repairs.

  • Maintenance fees, if you're moving into a flat or Shared Ownership property with common areas shared between residents.

Building an emergency savings fund can help you manage unexpected costs that may crop up! 

If you're starting your first-time buyer journey and would like to explore your mortgage options, contact our friendly team today. We offer face-to-face, phone and video appointments to suit you.

Find more useful first-time buyer content in our First-Time Buyer Hub.

YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.