The cost of buying a house

Make no mistake about it - buying property is expensive, however modest your new home. A mortgage is not the only expense.

Before you can take possession of your house, there are extra one-off charges and fees you'll come up against. When working out your budget, you need to be sure you have money ready to pay them.

These include:

  • deposit
  • mortgage arrangement fee
  • valuation fee
  • legal fees
  • Stamp Duty or land transaction tax, depending on where in the UK you are. Our calculator has the latest rates here.
  • removal costs

And don't forget once you're in your home, there'll be regular ongoing bills you'll face as a homeowner, on top of your regular mortgage payments, such as:

  • council tax
  • energy bills
  • house insurance
  • repairs and decorating
  • furnishings

Here is a guide to how much you're likely to pay out as part of the house-buying process.

How much deposit is required for first time buyers?

Finding a deposit is the biggest hurdle for first time buyers. You'll need to have saved at least 5% of the price you're paying for your new home before you can apply for a mortgage. For a house worth £150,000, that means saving £7,500 just for the minimum deposit.

If you're able to save more and can afford a bigger deposit, you'll probably get a better mortgage deal. See our choice of first time buyer mortgage deals.

People who can manage to save only 5% can get extra help from the government. Look at the government's Help to Buy scheme which is designed for people in your situation - whether you're a first time buyer or already in a house and wanting to move up the property ladder.

How much is Stamp Duty for first time buyers?

In England, Stamp duty, or to give it it's full name, Stamp Duty Land Tax  (SDLT) is a tax which is usually payable when you purchase a home costing more than £125,000. In Scotland it's called the Land and Buildings Transaction Tax (LBTT), and in Wales it's Land Transaction Tax.

However, under changes announced in the 2017 Budget, first-time buyers in England no longer have to pay stamp duty on property purchases up to £300,000. If you’re buying a home costing up to £500,000, you don’t have to pay Stamp Duty on the first £300,000, but must pay it at a rate of 5% on anything above that.

If you’re purchasing a property costing over £500,000, you’ll have to pay Stamp Duty at standard rates.These rates increase depending on how much your house costs to buy. Between £125,001 and £250,000 it's 2% and it steadily increases to 12% on £1.5 million properties.

Stamp Duty relief was extended to first-time buyers using Shared Ownership schemes in the Autumn 2018 Budget, including those who've purchased properties since November 2017.

You can find what the stamp duty rates for the different parts of the UK are and work out exactly how much you'll pay with our Stamp Duty calculator.

You can also speak to one of our mortgage advisers.

They're happy to answer your questions and give any help they can. There's no commitment and no charge. Our service is fee free.

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