Buying your first home is one of the biggest financial milestones you'll ever reach – exciting, nerve-wracking, and packed with emotions. Most first-home buyers spend months diligently saving their deposit and calculating what they can afford in mortgage repayments. But here's what catches many people off guard: the additional expenses that emerge throughout the buying process.
Quick Answer: The hidden costs of buying a first home in NZ typically total $8,000-$15,000 beyond your deposit. This includes legal fees ($1,500-$2,500), building inspections ($500-$900), LIM reports ($300-$450), moving costs ($1,500-$2,500), insurance, and a maintenance emergency fund ($2,000-$5,000).
These "hidden costs" aren't actually hidden – they're just rarely talked about in the early stages of home buying. Yet they can be the difference between a smooth, stress-free purchase and an unexpected financial squeeze that leaves you scrambling.
At Luminate Financial Group, we guide first-home buyers across New Zealand through this process every day. Our goal is to help you avoid common financial traps by understanding exactly what to budget for from the very beginning. When you know what's coming, you can plan properly and buy with confidence.
This guide breaks down every additional cost you'll face when buying your first home, so nothing catches you by surprise.
Here's what you should realistically budget for beyond your deposit and mortgage repayments:
Total Additional Costs: $8,000 - $15,000+
This is on top of your deposit and mortgage repayments. For example, if you're buying a $700,000 home with a 10% deposit, you're looking at:
Let's break down each cost category in detail.
Before anything becomes official, you'll need a lawyer or conveyancer to handle the legal side of your purchase. They perform essential tasks including:
Typical Cost: $1,500 to $2,500, depending on the complexity of the transaction and property type.
The cost can increase if you're:
Luminate Tip: Request a comprehensive quote upfront that includes all potential disbursements (additional charges for searches, courier fees, and administrative costs). Some lawyers offer fixed-fee conveyancing, which provides cost certainty. Ask if they offer a payment plan where you pay in stages rather than all at once.
A property might look perfect during a viewing, but appearances can be deceiving. Hidden underneath could be:
A professional builder's report (also called a pre-purchase inspection) provides an objective assessment of the property's condition, identifying both current issues and potential future maintenance needs.
Typical Cost: $500 to $900 for a standard three-bedroom home. Specialist inspections like methamphetamine testing, detailed moisture analysis, or electrical surveys cost extra.
Why this matters: Many banks won't approve your loan if significant issues are discovered without a plan to address them. More importantly, a builder's report protects you from buying a property with expensive hidden problems.
What if issues are found? You have several options:
Luminate Tip: Don't skip this step to save money. A $600 inspection can save you from $50,000+ in unexpected repairs. Always attend the inspection yourself if possible – the inspector can explain issues directly and answer your questions on-site.
Most of the time, banks use internal Automated Valuation Models (AVMs) to assess property values. However, in certain situations, they'll require a registered valuation – a formal assessment conducted by a licensed valuer.
When is a registered valuation required?
Typical Cost: $600 to $800, depending on property location, size, and urgency.
Important note: The valuation must be ordered through the bank's approved platform (such as CoreLogic or Valocity) and cannot be arranged independently. Your lender will coordinate this, but you'll typically pay the fee.
If the valuation comes in lower than your purchase price, you may need to:
A Land Information Memorandum (LIM) is an official document from the local council that contains crucial information about the property, including:
Typical Cost: $300 to $450, depending on the council and turnaround time (standard vs. urgent).
Why it's essential: The LIM reveals whether building work was consented and properly signed off. Unpermitted work can:
Red flags in a LIM:
Luminate Tip: Your lawyer will review the LIM, but ask them to explain anything that seems unusual. If significant issues emerge, you may need to renegotiate or reconsider the purchase. Some issues can be resolved, but others are deal-breakers.
Your lender will require proof of full replacement home insurance before they'll release any loan funds. This isn't optional – it's a condition of your mortgage.
What you need:
How to arrange it:
Typical Cost: $1,000 to $2,500 annually, depending on:
Luminate Tip: Don't just choose the cheapest policy. Look at:
While many major banks have moved away from upfront establishment fees, some costs may still apply depending on your lender and loan structure.
Potential fees include:
Typical Annual Cost: $0 to $500, depending on the lender and whether you're using special products like offset mortgages or construction loans.
Good news: Many lenders currently offer cashback incentives or contribution toward legal fees to attract new customers. These typically range from $1,000 to $4,000 depending on loan size.
Luminate Tip: Ask your mortgage adviser which lenders are offering cashback or fee waivers currently. These incentives can offset many of your purchase costs. However, don't choose a lender solely based on cashback if their interest rates are significantly higher – calculate the long-term cost difference.
From settlement day forward, you're responsible for all property costs. These bills start accumulating immediately, and some require payment in advance.
Annual Cost: $2,000 to $4,000+, depending on your property's location, size, and council valuation.
Councils typically bill quarterly or annually. At settlement, you'll often need to reimburse the seller for any rates they've prepaid beyond settlement date – your lawyer will calculate this adjustment.
Luminate Tip: Contact your council shortly after settlement to set up payment arrangements. Many councils offer direct debit plans that spread the cost across the year, making budgeting easier.
Typical Monthly Cost: $150 to $300 combined for a typical household.
You'll need to arrange:
Some utility providers require bonds or upfront payment, particularly if you don't have an existing account history with them.
Moving expenses add up faster than most first-home buyers expect. Even a modest move involves multiple costs:
Cost: $300 to $1,000+ depending on:
Lock changes: $200 to $500 is a wise investment. You never know how many copies of keys exist or who has them.
Realistic Moving Budget: $1,500 to $2,500 to move comfortably without cutting corners.
Luminate Tip: Book movers early, especially if you're moving during summer or on a weekend. Last-minute bookings cost significantly more. Consider asking friends to help with smaller items if you're trying to reduce costs – just budget for pizza and drinks!
Even well-maintained homes require ongoing work. Unlike renting, where the landlord handles repairs, every issue is now your responsibility and expense.
First-home buyers commonly face these expenses within the first 12 months:
Luminate Tip: Establish a home maintenance emergency fund of $2,000 to $5,000 and keep it separate from your everyday spending. Things will break at the most inconvenient times, and having funds ready reduces stress significantly.
Unexpected repairs are normal, not a sign you bought a bad house. Even new homes require maintenance. The key is being financially prepared rather than caught off guard.
This isn't a direct cost, but it can become the most expensive mistake first-home buyers make.
When you make an offer, it typically includes conditions such as:
"Going unconditional" means removing these protective conditions, making your offer legally binding regardless of what happens next.
Some buyers, eager to secure a property in a competitive market, remove conditions too quickly—sometimes before they've even received formal loan approval or completed their due diligence.
If something goes wrong after you go unconditional:
Always:
Never:
Luminate Tip: Pre-approval and formal approval are different. Pre-approval is an indication based on your circumstances; formal approval means the bank has fully assessed both you and the property and committed to lending. Always wait for formal approval before going unconditional on your finance condition.
Budget between $8,000 and $15,000 for all additional costs beyond your deposit and mortgage. This includes legal fees ($1,500-$2,500), building inspection ($500-$900), insurance setup, LIM reports ($300-$450), moving costs ($1,500-$2,500), and a maintenance contingency ($2,000-$5,000).
While not legally required, a builder's report is highly recommended and sometimes required by lenders. It costs $500-$900 and can save you tens of thousands by identifying structural issues, weathertightness problems, or maintenance needs before you commit to purchase.
A Land Information Memorandum (LIM) is a council report showing building consents, zoning restrictions, and compliance issues for a property. It costs $300-$450 and is essential for understanding any legal or structural risks. Most lawyers and lenders strongly recommend getting one.
You must have full replacement home insurance in place before your loan settles. Contact insurers as soon as your offer is accepted to get quotes and arrange cover. Your bank won't release funds without proof of insurance.
Some costs like LIM reports and building inspections are typically paid by the buyer, but you can sometimes negotiate with the seller to contribute toward repairs identified in the builder's report. This is more common in buyer's markets or if significant issues are discovered.
If you remove your finance condition before getting formal bank approval and your loan falls through, you could lose your deposit (typically 10% of the purchase price) or be legally obligated to complete the purchase without financing. Always wait for written approval before going unconditional.
Banks often use Automated Valuation Models (AVMs) for low-risk loans with 20%+ deposit. However, if you have less than 20% deposit, are buying privately, purchasing off the plans, or the property is unusual, the bank typically requires a registered valuation costing $600-$800.
Financial advisers recommend keeping $2,000-$5,000 as a home maintenance emergency fund in your first year. Common unexpected costs include hot water cylinder repairs, plumbing issues, appliance replacements, and urgent weatherproofing work.
Use this checklist to ensure you've budgeted for everything and completed all necessary tasks:
Buying your first home involves significantly more than just saving a deposit and securing a mortgage. The additional costs outlined in this guide—totaling $8,000 to $15,000 on average—are real, common, and frequently underestimated by first-time buyers.
However, these costs don't have to derail your plans or create financial stress. With proper planning, realistic budgeting, and expert guidance, you can navigate the process smoothly and confidently.
The key is knowing what's coming. When you understand the full picture from the start, you can:
At Luminate Financial Group, we specialize in guiding first-home buyers through every aspect of the purchase process—not just the mortgage, but the complete financial strategy. We help you understand exactly what you'll need to budget for, when costs will arise, and how to structure your finances to handle everything comfortably.
Book a free First-Home Buyer Strategy Session with Luminate.
We'll help you:
Don't let hidden costs catch you off guard. Get expert advice and buy your first home with complete confidence.
Contact Luminate Financial Group:
📞 Call 0800 333 400Your journey to homeownership starts with understanding the complete picture. Let's make sure you're fully prepared for every step ahead.