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What are the real costs of getting a mortgage?

It’s expensive business buying a house!

Forget the sale price, you’ll need to keep your EFTPOS card handy as there are a few other costs to consider, though not all are essential – so don’t fret yet!

Cost And Traps

Here are some costs to consider:

Low Equity Fees


Dependent on your loan value

If your deposit is under 20% you will get stung with low equity fees. Some banks charge a higher interest rate – anywhere from 0.25% to 2% – while others slap on a one off fee of up to 2% of your loan (it can normally be included in your total mortgage). It’ll hurt either way, so we’ll help you figure out the right way to go to minimise the pain.


$600 – $1200

A registered valuation will give you a better picture of a home’s current ‘on the market’ value. It’s much more accurate and current than a CV (Capital Valuation) produced by the council.

Legal Fees

$1300 – $3000 

To complete the purchase you’ll need a solicitor. Your lender may provide a cash incentive to put towards legal fees, but it’s best to bank on spending about $1500.

Building Inspections

$450 – $1200


Smart move to have a proper building inspection done, and most banks require it as a condition of purchase.


House Insurance

$1200 – $2000 pa

Banks definitely require you to have the house insured so that if it burns to the ground, gets flooded or you accidentally drive the car through the garage wall, it can be repaired.

LIM Report

$325 or $439 if urgent

A Land Information Memorandum… sounds like gobbledygook, but a LIM is really important as it outlines any extra info held against the property which could be valuable before purchase. For example resource consents, special land features, any rates owing, and much more.

Life Insurance

$250 – $1000 pa

Banks don’t require this but it’s a totally sensible, grown up thing to do. You’re about to take on a chunky liability so covering your backside makes sense.  Adding income and medical cover will increase the costs.


$500 – $1000 pa

If the property’s used as an investment, accountancy fees could come into the mix, and will crop up annually.

That probably looks more scary than it actually is! Not everything is essential. But it is best to go in to house hunting mode with your eyes wide open to avoid any nasty surprises. If you’re worried about all those extras, we can help you work through them before you begin your property search.