Calculating the costs of purchasing a new home

Buying a home is a huge undertaking and it's important that you plan accordingly to make sure that you know all of the costs involved. We've compiled a checklist of costs to help you calculate whether you can afford to purchase a property.

One-off costs

Deposit - the more you can put down as a deposit the better as this will help to reduce the cost of your mortgage and mortgage repayments.

Surveyor's fees - a surveyor needs to view the property you wish to buy in order to give your lender an official value for the property. This usually costs a few hundred pounds, and may cost more if you want a more detailed survey into the condition of the property.

Stamp Duty - if your property costs more than £175,000, then you will need to pay between 1 and 4 per cent of its value as Stamp Duty Land Tax. You may not have to pay this if your property is in an area that has been designated as disadvantaged. If your property is a new build, your property developer may pay this for you.

Legal fees - you will need to pay your solicitor fees for the legal paperwork required for your property purchase. These can vary from solicitor to solicitor, and will also depend on the price of your property. The fees will include admin costs, land registry fees, local authority fees and drainage and environmental search costs.
Higher lending charge - you may have to make this one-off payment if the value of your property is particularly high. This is a form of insurance that protects your lender should you be unable to repay your mortgage.

Moving costs - remember to take into account the cost of moving home. If you are hiring a removals firm, seek out a few quotes so that you can compare removal firm costs.

Ongoing costs

Your mortgage - you will need to calculate how much your monthly mortgage repayments will be and how long it will take you to pay off the mortgage. Take into account the effect that changes in interest rates may have on your monthly repayments in the future. If your mortgage is an interest-only mortgage, then you will need to budget for the monthly payments you need to make into a savings or investment account in order to pay off your mortgage at the end of your term.

Mortgage protection costs - you may choose to take out mortgage protection insurance to help you pay for your mortgage should you become unable to make repayments.
Insurance - many lenders will stipulate that you need to take out buildings insurance to protect your home. You will probably also want to take out contents cover too.

Utility and council tax bills - calculate the costs of council tax in the area that your property is in, as well as your average utility bill costs and factor these into your monthly budget plan.

Some mortgage lenders have mortgage calculation tools on their websites. Santander provides a mortgage calculator where you can work out the cost of your mortgage and the rate of your monthly repayments. Using these calculators can help you determine how much you can afford to spend on a property.