The ongoing costs of home ownership

Explore the longer term costs of owning your own home or investment property

Buying property is often seen as the ultimate symbol of independence and stability. But beyond the excitement of buying a place of your own, it’s important to understand the costs you’ll have to budget for after you’ve made your deposit. From council rates to insurance premiums, these costs can add up and have a big impact on your finances.

Before you jump into homeownership, let’s unpack some of the ongoing costs so you can make sure you’re covered financially.

Bank repayments & fees

After going through the process of getting a home loan it’s hard to forget about the financial burden of mortgage repayments. But there are a few other sneaky costs to consider – and tricks for how you can make repayments work for you.

Home loan repayments

Once you’ve bought your home, the repayments you make on your mortgage will likely make up a big chunk of your expenses. Depending on the type of loan you have, your payments can either stay the same (with a fixed-rate loan) or change over time (with a variable-rate loan).

Helpful hint: Home loans will usually give you the choice of how often you want to make payments – weekly, fortnightly or monthly payments. Remember to choose the frequency that works best for you, as it can make an impact on how quickly you’re able to pay off your loan.

Home loan fees

Depending on the home loan you choose, there may be account keeping and/or package fees to think about. These can either be a small monthly cost or a bigger yearly fee. It might not seem like a big deal compared to your home loan repayments, but these fees can add up over time. If you want to keep things simple, look for a home loan (like the ones we offer) with low or no fees.

Account & credit fees

For most people, buying a property also marks a change in their general finances. Whether or not you choose to go with a home loan package (when you combine a home loan with other accounts and credit cards) it’s important to consider the fees and charges that your other bank accounts and credit cards might be charged.

Rates & utilities

Council rates, strata levies, and utilities are some of the most common expenses that homeowners face once loan repayments are out of the way. These costs can add up, so it’s important to understand what they are, how they are calculated, and how you can budget for them.

Council rates

No matter where you live, you’ll have to pay council rates if you own your own home or property. The money goes towards local services and infrastructure, like footpaths and garbage collection. Council rates are calculated annually and usually due every quarter – check your local council website for more information on what these payments would look like for you.

Water, gas, electricity

Keeping the lights on and the water running may seem straightforward, but it’s important to put a little thought into these expenses. Make sure you’ve done some research on providers, and consider putting in a reminder to reassess every few years to make sure you’re still getting a good deal.

If you’re an investor: While you’ll have to pay for any installation costs to connect your property to things like gas and electricity, generally speaking you won’t be responsible for the ongoing utility bills. That said, you will have to cover the cost of water as it’s always on (unless it’s separately metered).

Strata levies

If you buy an apartment or townhouse, chances are you’ll have to pay strata levies. These are the charges, usually decided annually and paid quarterly, that you pay to the legal entity responsible for maintaining the building and common property. Make sure to check with your real estate agent to get a better understanding of what you might be expected to pay.

Insurance & maintenance

Once you’ve bought property, you’ll want to make sure it’s protected and properly taken care of. That means factoring in expenses for insurance, maintenance, and if you’re a landlord, property management.

Building and/or contents insurance

Whether you’re living in it or renting it out, it’s important to protect your property from damage and loss. The cost of home insurance can vary, so it’s important to do your research and choose the cover that suits you best.

• If you’re an owner occupier: You’ll be able to choose to insure your building, what’s inside it, or both depending on the type of property you own. Make sure to think through your situation and needs before making a decision.
• If you own an apartment: You probably won’t need to take out building insurance, as this should be covered as part of your strata plan (you can check the strata reports to be sure). Instead, think about taking out contents insurance to protect the belongings in your home.
• If you own an investment property: Even if you’re not living in it, it’s important to protect your property. As a landlord, you can choose to take out insurance for the building only, or also add on coverage for things like appliances, carpet and furnishing you might be leasing with your property.

Maintenance & repairs

Whether you’re an owner occupier or an investor, you’ll need to keep your property functioning and in good condition. This might look like routine upkeep, repairs or upgrades to things like plumbing, electrical and landscaping. These expenses can be inconsistent, so it’s smart to have some extra cash set aside to cover unexpected costs.

Property management

If you’re not living in the property, you’ll need to pay someone to manage it for you. This will include things like showing the property to tenants, conducting regular inspections, collecting rent, and organising repairs. Depending on who you choose to manage your property, these fees can be charged as a percentage of the monthly rent or as a flat fee.