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How much does it cost to buy a home?

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Written by Dan Base, Financial Content Writer

26 April 2020

Your home could be the most expensive purchase you ever make. Here is how much you might spend and how to make sure you can afford a mortgage and all of the other costs.

Women looking at house prices in estate agent window

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

How much could you pay in total?

The cost will depend on the price of your property, the fees you have to pay and the mortgage you get.

Here is how much it could cost to buy a £200,000 property:

ExpenseTypical cost
Deposit 10%£20,000
Booking fee£100
Arrangement fee£1,000
Survey fees£400
Transfer fee£35
Valuation fee£150
Moving home£450
Solicitor's fee£1,200
Broker or advisor's fees£500
Total cost£25,335

With a £20,000 deposit, you would need to get a £180,000 mortgage. Paying this off could cost £288,054 with a 25 year mortgage at 4%.

Including paying off the mortgage, buying the property would cost you a total of £313,389 spread over 25 years.

This amount could be higher if your interest rate rises or you need to pay for maintenance and renovations.

Here is how to check if you can afford a mortgage

How much a mortgage could cost

Once you have bought a home, you have to start paying back your mortgage each month. Over its entire term, a typical mortgage could cost:

Purchase price£200,000
Deposit£20,000
Term25 years
Interest rate4%
Monthly repayment£960
Total amount repaid£288,054

Before you take out a mortgage, make sure you can afford it. Here is how to calculate your living costs and your budget.

House price

The amount you pay for your home affects:

  • The deposit you need to save

  • How much your mortgage costs

  • How much stamp duty you pay

  • The fees you are charged

You can find the average in the area you want to buy a home using Zoopla's house price calculator.

Deposit

When you buy a home you need to pay for a percentage of the price yourself either from your savings or your equity in your current home.

Most mortgages require a deposit of 5% or more before they pay for the rest of the purchase.

For example, a 10% deposit on a £150,000 home would be £15,000. Your mortgage would cover the remaining £135,000, which is 90% of the total price.

This means the mortgage's loan to value (LTV) would be 90%. Mortgages with a lower LTV usually come with lower interest rates and fees.

How to save for a deposit

Mortgage fees

Mortgages can come with several fees, which lenders have to include when they show the cost of a mortgage. They include these in the Annual Percentage Rate of Charge (APRC) to show an interest rate that also includes the fees you have to pay. These can include:

Booking fee

Some lenders make you pay this just to apply for one of their mortgages. It is not usually refunded if you are not offered the mortgage.

Arrangement fee

Also known as...

  • Product fee

  • Completion fee

Some mortgage deals come with a fee of up to £2,000 you pay if you are accepted. You can either

  • Pay it straight away

  • Add it to your mortgage balance

Higher lending charge

Some lenders charge a fee of around 1.5% of the mortgage amount if you have a deposit of less than 10%. Not every lender charges this as a separate fee.

Valuation fee

Lenders need to check how much a property is worth before they can offer you a mortgage. They usually charge a fee of £150 or more to cover the costs of a company valuing your property.

Transfer fees

Your lender may charge you a telegraphic transfer fee when they send the money for your purchase. This usually costs between £25 and £50.

Survey fees

You can pay for a qualified surveyor to check a property before you buy it. They will look at the condition of the property and let you know if there are any issues that could cost you money later.

You can pay more for a detailed survey, and it usually costs more for expensive properties. A basic survey could cost £250, but an extensive buildings survey on a £2 million home could cost £2,000.

Solicitor's fees

When you buy a home a solicitor will:

  • Draw up contracts

  • Pay the stamp duty

  • Transfer funds for the purchase

  • Run searches to check for planning or environmental issues

  • Register your property with the Land Registry

They may charge a set fee, an hourly rate or a percentage of the purchase price, but it will usually cost between £500 and £1,500.

Using an adviser or broker

You can get advice from a broker or independent financial adviser (IFA) when you take out a mortgage. This could help you find a suitable deal and even save money if they get you a better mortgage than you could find yourself.

The average cost of a mortgage broker is £500 if you choose the deal they recommend. Some brokers are free because they are paid commission instead, but sometimes these brokers only offer mortgages from a limited range of lenders.

Here is everything you need to know about finding a mortgage broker

Stamp duty

You have to pay stamp duty land tax (SDLT) when you buy property in England, Wales or Northern Ireland. In Scotland you pay Land and Buildings Transaction Tax instead.

You can work out the stamp duty you need to pay using GOV.UK's stamp duty calculator.

Moving costs

It can be cheaper to move your belongings to your new home yourself, especially if you have a large enough vehicle to move your largest items. However, you may need to pay to:

  • Hire a removals company

  • Hire a van

  • Take the day off work

Moving home usually costs between £300 and £600, but you could pay much more if you use a removals company and have lots of large possessions or move a long way.

Costs of owning your home

Once you have bought a property you will need to pay for:

  • Council tax, which is based on where you live and how much your property is worth. Here is how to make sure you are paying the right amount of council tax.

  • Maintenance of your property like repairs, decorating, DIY and improving your home.

  • Insurance for your buildings, which lenders will make sure you take out as a condition of your mortgage. You may also need contents insurance to cover your possessions or mortgage protection insurance in case you lose your job.

  • Utility bills like gas, electricity, water, television, phone and broadband.

Mortgage repayments and interest

On a repayment mortgage you will pay off the full balance by the end of the term plus the interest on the loan.

Interest is charged as a percentage rate on your outstanding balance, so the higher the rate, the more you will pay.

You can work out how much your mortgage repayments will be by entering the property price into the calculator above our mortgage comparisons. It will then show you how much it will cost each month and overall so you can easily compare how much each deal costs.

What type of mortgage is right for you?

Other mortgage fees

You could also have to pay the following fees on your mortgage after you have taken it out:

  • Early repayment fees come with some mortgages if you make an overpayment, pay them off before an initial interest period ends or switch to another deal.

  • Exit fees of £75 or more are charged on some mortgages when you pay them off, even if you repay them at the end of the term.

  • Missed repayment fees are charged if you fail to pay your mortgage on time.

If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs.

Compare mortgages

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