Costs involved when buying your first home

Buying your first home is very exciting but equally it can be a daunting time for many as they navigate the real estate world, solicitors, mortgages & savings. When it comes to savings for buying a home, the rule of thumb is that you need a minimum deposit of 10% but there are additional upfront costs involved to be aware of & outlined as follows:

*Example based on a purchase price of €350,000 and mortgage of €315,000 (90%)

1.Deposit at 10%: €35,000

The minimum requirement across all lenders is a 10% deposit however there is good news for First Home Buyers who are purchasing a newly built home as they can avail of the governments ‘Help to Buy scheme’ and / or the governments First Home Scheme to assist with their deposit. Further info on both schemes can be found via blogs on our website.

2.Solicitor’s/Legal Fees: allow approx. €2,800

You should allow approx. €1,250 plus VAT for your solicitor’s fees and a further €1,200 for ancillaries such as Land Registry, Searches, Registration of Mortgage, Opening New Folio (new houses), Registration of Folio, Commissioner for Oaths + Miscellaneous costs

3.Stamp Duty: this is 1% of your purchase price: €3,500

Applies up to a purchase price of €1 million, the excess over €1 million is charged at 2%

4.Valuation Fee: generally €150

This is instructed & required by the lender but the borrower must pay for it

5.Surveyor’s Report: generally €369 (€300+VAT)

This is not normally a requirement of the lender but is something recommended when purchasing a second hand home as it will help identify any potential structural defects such as damp ingress, ventilation issues, roof, heating/plumbing/electrical system, pyrite, rot etc.

Total €41,819 (if not availing of or getting government scheme assistance)

Some lenders offer 2% cashback which helps cover these costs. Cashback in this example is €6,300 & paid approx. 40 business days after the mortgage closes.

*Also, to note, not all of the funds required have to be from savings, a portion can be gifted (if available).

Ongoing Costs

In addition to the upfront costs there are also ongoing costs to be aware of & factor into your new monthly budget once you’re in your home:

1.Mortgage Protection

This is Life Assurance you must have as a condition of your mortgage; the lender insists on this so that in the event of your death the mortgage would be cleared, the cost can range from €10pm upwards depending on age, smoking status, health etc

2.Home Insurance

The cost of home insurance depends on your home but expect to pay anything from €350 per year

3.Property Tax

This is set out in bands, for our example of a purchase price of €350,000 the cost is €315 per year

4.Management Fees

For all apartments there is a management fee but the good news is that the charge covers your property insurance (not contents).

For many housing developments there is also a management fee to help maintain the green areas and for the general upkeep of the estate