The extra costs of buying a home
This article is part of a fictional case study series following "Sarah", a typical first home buyer in Victoria. Read each article to follow "Sarah" through a variety of articles exploring issues related to buying a home.
After years of saving, Sarah was finally able to step foot in her own house. It was a great feeling – one of accomplishment.
But as she soon found out, paying a deposit isn’t the only cost new home owners have to pay. In just the first few weeks, she encountered having to pay the following costs – and she didn’t expect all of them:
Moving costs: With a few pieces of furniture and plenty of boxes, Sarah had a couple of friends helping but wanted to drastically reduce her moving time by using a service. The privilege? A cool $1,000.
New utility costs: Signing up new contracts for energy, internet and water, all cost money. Altogether the costs for moving her contracts – and signing up new ones – ended up in the realm of about $400.
Repair costs: Within just a few weeks of moving in, Sarah found one of the pipes in bathroom had burst. Thankfully the leak wasn’t too bad, but it still cost $150 to repair – with a small hole in the wall!
Those are just some of the costs she found. But a year in, she discovered an extra cost some home owners don’t think about until it’s too late….
Rising interest rates
Socked with a 20 basis point rise, Sarah found that her repayments went up by about $50 a month. Now, because she had paid a good sized deposit, that won’t eat into her monthly income too much. But on $55,000 a year salary, every dollar counts.
You’ll never be able to avoid every expense. But being prepared for extra ones can go a long way in reducing any negative impact they can have on your financial health.
Sarah's mortgage isn't the only thing she needs to prepare for. She's going to take these costs and factor them into her household budget, so she's always prepared.