True costs of buying a home
Quick answer: One main cost is Stamp Duty Land Tax at 0–12% of the property price. Other costs may include an arrangement fee, legal fees, land registry and searches, buildings insurance check, booking and CHAPS fees. These can add up to roughly £3,500–£5,000, but it will depend on your situation.
When it comes to affording a new home, it’s not just about the property’s price tag. There are lots of small or one-off costs which can add up to thousands of pounds. No need for nasty surprises though. You can use this guide to budget, save up and make the best decisions for you.
Read on to learn about the main costs you can expect before and after you buy a home, other than your deposit and mortgage payments.
Looking for a mortgage? We can help with that, too. Tell us a bit about your needs and we’ll show you the best offers from over 100 trusted lenders. Comparing mortgages with us is free and will not affect your score. Just remember, we’re a broker, not a lender.
Costs when you’re buying a new house
We’ll keep it simple. Here’s a quick summary of common expenses when you buy a home.
| Expense | Typical cost |
|---|---|
| Stamp duty | 0%–12% of property price paid to the UK Government, with discounts for first-time buyers |
| Arrangement fee | £1,000-£2,000+ |
| Legal/Conveyancing fee | £2,000 (including 20% VAT) |
| Surveyor fee | £400-£1,500 |
| Mortgage valuation | £150-£1,500 (but often paid by the lender) |
| Land registry and searches | £250-£300 |
| Booking fee | £100-£250 |
| CHAPS / Telegraphic transfer fee | £15-£75 |
| Buildings insurance check | £20–£60 |
| Broker fee | Varies widely — it can be free, a fixed rate, an hourly rate, or a percentage of the mortgage |
Stamp duty
IIf you’re buying a home that costs more than £125,000, you’ll usually have to pay Stamp Duty Land Tax (SDLT). How much you pay depends on the value of your home, with charges increasing in fixed bands with the price of the property. First-time buyers may get a discount. The Government’s stamp duty calculator can help you work out how much you’ll need to pay.
Mortgage arrangement fee
Lenders often charge a fee for setting up your mortgage. This is called a mortgage arrangement fee, or administration fee. It can cost from £1,000 to over £2,000. A high mortgage arrangement fee may help lenders offer more attractive interest rates without losing money, so make sure to check fees as well as rates when you compare mortgages.
You can pay the arrangement fee up front or ask to add it to your mortgage. Paying up front means you may lose it if the sale falls through, although it’s sometimes refundable. Adding it to your mortgage means you can pay it off later, but you will pay interest on it.
Legal fees
Legal fees — also called conveyancing fees — are what your solicitor or conveyancer charges for the legal work that comes with buying a house. This covers everything from transferring ownership to checking environmental factors. You’ll usually have to pay costs as they come up. The total expense is about £2,000, including 20% VAT.
Mortgage valuation fee
Many lenders cover the mortgage valuation fee for you, which can otherwise cost between £150 and £1,500. The lender uses this fee to hire a professional surveyor, who checks if the property is worth what you’ll pay for it. This is for the lender’s security — it means that if you can’t pay your mortgage they can sell your house as a last resort and get enough money back.
A mortgage valuation can affect what the lender will agree to give you — for example, even if you have a mortgage in principle for £300,000, they may decide the property is only worth £250,000. In this case, you’d have to fund the rest yourself or negotiate the price down with the seller.
Survey fee
It’s often a good idea to get your own surveyor to inspect the property for problems like damp or subsidence. This can help you feel sure of what you’re getting, and that you’re agreeing to a fair price. Surveys usually cost between £400 and £1,500.
Land registry and searches
HM Land Registry takes care of transferring your new house into your name. This fee is due after completion – usually through your solicitor – and increases with the value of your property. It generally costs between £250 and £300 but could be more.
Mortgage booking fee
A mortgage booking fee is the mortgage application cost. Not all lenders charge this fee when you apply for a mortgage. If you do pay one, it’s unlikely you’ll get it back, even if you do not take the mortgage. Mortgage booking fees are usually between £100 and £250. They can sometimes be added to the overall cost of the mortgage, meaning you’ll pay interest on it, or included in the mortgage arrangement fee.
CHAPS fee
A CHAPS fee is also known as a telegraphic transfer fee. It’s what the mortgage lender charges for sending the mortgage money to your solicitor so you can buy your home. This fee is usually due on the day of completion — it’s typically around £15 to £75 and non-refundable.
Own buildings insurance check fee
If you choose not to take buildings insurance with your mortgage company, they’ll need to check that the insurance you have covers them properly if your house needs to be rebuilt. You’ll usually be charged a fee of around £20 to £60 for this check.
Higher lending charge
Lenders used to have a higher lending charge for mortgages with a higher loan-to-value ratio (LTV), like 95% and 100% mortgages. Most no longer have specific higher lending charges but roll them into other costs instead. Charged separately or not, the idea is to help lenders manage the risk they take by lending you a lot more than your deposit. The cost can vary depending on your lender and LTV.
Broker fee
If you use a mortgage broker to help you find and apply for a mortgage, you may have to pay a fee for their services. Mortgage brokers can charge in lots of different ways — like an hourly rate, fixed charge or percentage of the mortgage you take. Others, like our award-winning mortgage partner Picnic, don’t charge you any fees but instead take a commission directly from the lender. Always ask how much of the market your broker covers.
You can learn more about the costs of buying a home on MoneyHelper.
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What our expert says
Mortgage brokers can be incredibly useful. But remember you don’t have to use the broker your estate agent recommends. Like with most things, it pays to shop around.Jacqui Hamilton, Experian UK
Costs after you’ve bought your home
Removal costs
Sometimes all it takes to move your stuff is a rented van, a group of friends, and pizza to bribe them with. But if you’ve got a big family or houseful of heavy furniture, you may need to hire a proper removal company. Depending on the size of your home, expect to pay around £400 to over £2,800 for their services.
Ground rent and service charges
You may have to pay ground rent and service charges if you’ve bought a leasehold property. Most flats are leasehold, meaning they have a freeholder who owns the land your home stands on, as well as any common areas. The freeholder will usually charge you for maintaining and insuring the common areas, such as the walls, roof and stairs. Fees can vary widely and it’s common to pay every three, six or 12 months.
Buildings and contents insurance
It’s important to have cover for both your property and everything in it. You can tailor the level of cover you need to your situation. Some companies offer a discount if you use them for both buildings and contents insurance. The cost, called a premium, depends on what’s covered. You may be able to pay yearly or monthly.
Switching utilities supplier
Switching to a new gas, electricity or internet company when you move? You may be charged an exit fee if you leave a fixed tariff before the end date. There is no cost for switching supplier, and a cheaper deal may be worth paying an exit fee, so it’s always worth comparing deals.
Decorating and furnishing
If you’ve bought a fixer-upper or are moving from furnished accommodation, you may need to pay for furniture, decoration and renovation to make your new house a home. If your budget doesn’t stretch that far, you might consider taking out a home improvement loan, 0% purchase credit card or similar.
Redirecting your post
CChanging your address with every single business, organisation, friend and family member can be a big task. So, it’s worth getting your post redirected from your old address for a while. Also, this can help protect you from identity fraud by keeping your personal documents out of strangers’ hands. Royal Mail can redirect your mail to any UK or overseas address for 3, 6 or 12 months for a fee of £45.
Long-term mortgage costs
Depending on the type of mortgage you have and how you manage it, you may come across additional costs in the future.
Interest rate changes
Some mortgage interest rates can go up or down while you have them, meaning your monthly payments can change too. These are called variable rates, including tracker mortgage rates. No one knows for sure how rates might change in the future, but it’s worth planning to see if you could afford a rate rise.
If you’re on a fixed rate mortgage, your mortgage payments should be the same each month until your fixed rate ends. When this happens, you’ll be put on the lender’s standard variable rate (SVR), which is higher. You may be able to switch to a better deal though. Make a plan for what happens when your fixed rate ends.
Late payment fees
If you overpay your mortgage or remortgage before the current term ends, you may have to pay a fee — usually around 1% to 5% of the amount you still owe on your mortgage. You may also have to pay back any incentives, such as legal fees or cashback.
Exit fee
Some lenders charge an exit fee — also called a redemption administration fee — for closing your mortgage account. It usually costs between £75 and £300 and may come on top of an early repayment fee if you’re exiting before your fixed rate ends.
How much does it cost to sell a house?
The cost of buying and selling a house often depends on things like property prices and how complicated the move is. But to help you budget, here’s a rough guide on how much it costs to sell a house.
Common fees for selling a home:
- Estate agent fees — 1% to 3% of the sale price
- Legal fees — £800 to £1,800
- Energy performance certificate (EPC) — £60 to £120
- Removal costs — £400 to over £1,000
Additional costs, depending on your situation:
- Remortgaging fees if you need a new mortgage — over £1,000
- Mortgage exit fee — £75 to £300
- Early repayment charges if you exit before the fixed rate ends: 1% to 5% of your balance
- Capital Gains Tax if you’re not selling your main home — up to 24% depending on your income
You can learn more about the costs of selling your home on MoneyHelper.
Hidden costs of buying a home
Some household purchases are a little different and come with costs you didn’t expect. Here are a few examples to give you an idea.
- Essential repairs — Before buying a home, it’s often a good idea to get a property survey to spot any problems that might need costly repairs, like roof work or damp treatment. This may be particularly important if you’re buying a fixer-upper.
- Leasehold costs — Leasehold homes (often flats) can come with ongoing costs like service charges and ground rent. Also, check if the leasehold needs extending soon. Anything under 90 years is considered a short lease.
- Bridging finance or temporary accommodation — The cost of buying and selling a house can go up if the two deals do not complete at the same time. You may need a bridging loan to buy the new home while you’re waiting for funds from the sale. If the sale completes first, you may need a short-term place to stay while you finish buying a home.
- Higher tax rates for second properties — You’ll pay a higher rate of Stamp Duty Land Tax if you buy an additional property, like a second home or buy-to-let.
- Pre-completion inspection for new homes — If you buy a home that’s just been built, it’s often a good idea to get an official check of its quality. Costs can start at £320.
Can I afford the costs?
We know a long list of additional costs may be off-putting! But bear in mind that not all of them will apply to you. You may want to get advice from an independent financial adviser, mortgage broker, lawyer and other professionals. Planning early, saving extra and reviewing your budget often may help you enjoy your new place instead of fretting about your bank balance.
If you’re a first-time buyer and not sure if you’re ready, consider the pros and cons of renting versus buying. Working out the costs of each could help you make the best decision for you.
Remember, there may be ways to reduce the cost of buying — like getting help from friends and family, using a Help to Buy scheme or finding ways to get a lower mortgage rate. You could ask lenders for a free agreement in principle to get a clear idea of your borrowing budget.
It’s a good idea to shop around for the best deals. Compare mortgages with Experian to see top offers from over 100 trusted lenders. It’s free and won’t affect your score.