What you pay for, even with a home loan.

The loan is one line in a larger budget

It is easy to think of a home purchase as 'the loan and the rest'. In practice the loan is a single line, and several other costs sit outside it entirely. Knowing them in advance is the difference between a comfortable purchase and a stretched one.

Stamp duty and registration

Stamp duty and registration are statutory costs payable on the transaction. They are set by state and vary accordingly, and they are not financed by the lender. On a large purchase they are among the biggest costs outside the loan.

The margin

The lender funds a share of the property's assessed value, not the whole of it. The portion it will not fund — the margin — is yours. If the valuation comes in below your agreed price, the gap widens (see loan-to-value).

Lender charges

• Processing fee, often a share of the loan plus tax.
• Legal and technical charges for assessing the property and title.
• Valuation charges for the property assessment.
• Insurance, which may be a condition of the loan.

Ongoing costs

Owning a home carries costs that continue after the loan is sanctioned: property insurance, society or maintenance charges, property tax, and ordinary upkeep. These belong in your monthly budget alongside the instalment, not outside it.

How to plan

Before committing to a price, add up the margin, stamp duty, registration, lender charges and a buffer for delays or a valuation gap. If that total leaves you with nothing in reserve, the purchase is larger than your finances can comfortably carry, regardless of what the lender is willing to lend.