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How to budget to make room for home loan fees

Unless you have a pile of cash sitting somewhere waiting to be used, you’ll have to take out a home loan if you want to buy a house. However, there is more to home loans than what expecting homebuyers have in mind. Other than the loan amount, there are home loan fees you have to shoulder. 

It’s safe to say that a house is expensive enough, but if you factor in the taxes and fees, it just gets more challenging to save up. Given today’s economic climate, where interest rates keep getting bigger, it’s easy to be terrified. However, as they say, there is a way if there is a will. It just takes some cinching of the belt in some areas of your finances, but you will get there if you follow some of the tips below. 

What are the costs you have to prepare for? 

Home loan application fees

You must pay an application fee when you apply for a loan. This usually covers the documentation of your mortgage. Also called establishment fees, application fees are one-off payments whose cost varies depending on the loan. It can be as low as $100 but also reach a thousand. There are special promos that lenders give to loan applicants. They sometimes discount the application fee as a special offer. 

Valuation fee

To determine how much to lend you, the banks must adequately assess your property’s price through a valuation process. And since it takes a workforce to do this, it comes with a price, too. Lenders may offer this for free on some occasions. 

Government fees

Included here is the stamp duty that the government requires for any transaction or document. There are concessions to stamp duty payments. Some states waive it if you are a first-time homebuyer.

Conveyancing fees

The property’s title will be transferred to your name in a process called conveyancing. This costs around $700 and up. 

Legal fees

Since obtaining a house entails a legal process, you should also prepare to pay legal fees for processing contracts and other documents. 

How do you budget for home loan fees?

First, your initial goal must be to save enough for the 20% deposit. If you qualify for any government scheme, this can be reduced. Some grants will allow you only to have 5% of the deposit.

Once your deposit cost is settled, calculate all other home loan fees. You can enlist the help of your trusted broker to do this. Since they have handled hundreds of mortgages before, it’s best to ask them for an estimate. How much would all these additional costs come up to? It’s going to be in the thousands. Again, know all the concessions you can avail of. Check state rules and shop for lenders with promo offers. 

Once you have a number, adjust it by a bit. Allow for some room for unexpected costs. Say the total cost is $2000, maybe make it $2500 just to be sure. 

If you want to be done with it, quickly revisit your weekly expenses. Look at areas where you can cut some to allow for some extra savings. Miscellaneous expenses also pile up every week. Check what items you don’t need for a few more weeks.


It’s always best to have professional guidance while dealing with all of this. Our brokers have your best interest at heart. We will work around your financial situation to help you get that dream property.