Costs involved in buying a house

Main costs when buying a house

Before you take out a mortgage, it’s important to make sure you’ve factored in all the fees involved in buying a home. They can vary widely, depending on the mortgage you choose and your personal circumstances.

Deposit

This is the cash amount you put towards the cost of the property.

To be eligible for a mortgage, lenders normally need at least 5% of the property's purchase price. For example, if you're looking to buy a home valued at £200,000, you'd need a upfront deposit of at least £10,000. But the bigger the deposit, the better the rates, with the best rates reserved for those with a 40% deposit or more.

In most cases, a bigger deposit gives you access to the best mortgage rates. So it's worth considering how big a deposit you can give when buying a home. Recent UK first-time buyer statistics found the average deposit for first-time buyers in England was £53,414 in 2022-23.

Stamp duty

This is a property tax you usually have to pay in England and Northern Ireland if you buy a home. In Scotland, stamp duty is called Land and Building Transaction Tax (LBTT) and in Wales it's called the Land Transaction Tax (LTT).

If you're a first-time buyer, you don't have to pay stamp duty in England and Northern Ireland on properties costing up to £425,000. If you're buying a second home in England or Northern Ireland, there is a surcharge of 3% of the property price for home's worth over £40,000.

The amount of stamp duty you need to pay for in Scotland and Wales varies, as different UK nations have different rates. Find out more using our stamp duty calculator.

Conveyancing fees

You'll need to pay for a conveyancer to sort out the legal side of buying a home.

How much you need to pay depends on the value of the property and whether it's a freehold or leasehold. According to Property Solvers' the average conveyancing fees in 2023 for a freehold property is around £1,184.21.

Legal fees

The legal fees are what the conveyancing solicitor charges for carrying out the work of managing the purchase of the property.

The conveyancing fee also includes disbursement expenses, which include the handling of local searches so they can flag any issues of the area (such as risk of flooding), and the deeds to your home.

Valuation fees

When buying a new home, your mortgage lender will want to conduct a house valuation to check you're paying roughly what it's valued for.

Some lenders don't charge a valuation fee as it's included in the mortgage deal with them. But for those that do, fees can cost upwards of £300.

Arrangement fee

A mortgage arrangement fee, also known as a completion fee, is a fee charged by some mortgage lenders for setting up your mortgage.

The cost varies depending on the type of mortgage, loan amount and rate of interest you'll pay, but you can expect to pay on around £1,000 on average.

An arrangement fee can be paid upfront, or added onto your mortgage. Choosing to add the arrangement fee to your mortgage can be useful if you don't have much cash left during the home buying process. But remember that you'll then have to pay interest on top of it.

Costs after completing your purchase

Congratulations, you've completed the costs of buying your new home! Now that you're a home owner, it's important to keep on top of these ongoing expenses.

Council tax

The cost of your council tax varies depending on:

• the valuation band for your home

• how much your local council charges for that band

• whether you're eligible for a discount

You can check online to see how much council tax you have to pay.

Monthly mortgage repayments

How much you pay towards your mortgage each month depends on the size of your deposit, how much you’ve borrowed, the interest rate and the length of the term. It's worth bearing all this in mind when deciding on the size of your mortgage.

If you choose a variable rate mortgage, it’s important to be prepared in case higher interest rates push up your monthly repayments. 

Service charges

If you live in a flat, you might face maintenance and services charges. These can run into thousands of pounds a year.

House maintenance

General maintenance on your home will cost money. For example, replacing an old boiler or repairing some brick work.

Your home buyer survey should also highlight what areas need fixed sooner.

Running costs

These include your utilities, as well as your phone, TV subscriptions and broadband.

You can compare internet providers with our broadband postcode checker.

Don't forget to also consider buying home insurance to protect your building and contents should the worst happen.

What affects how large these costs will be?

The costs involved in buying a house mainly depend on:

• the value of the home you're looking to buy

• the location

• whether the property is a freehold or leasehold

For your monthly mortgage repayments, interest rates affect how much you'll pay. A period of high-interest rates increases the cost of mortgage payments if you're on a variable rate mortgage.

Stay on top of mortgage trends and see what today's UK mortgages rates are.

How can I find the cheapest mortgage?

It's important to compare mortgages across the whole market to get a competitive rate to determine your monthly payments.

Compare mortgages with our broker partner Mojo to find the best mortgage rates for you.