Buyers fixate on the deposit percentage because it decides the lending door. The purchase still fails if the cash beside that deposit is missing. These costs are not exotic — they are simply easy to underestimate when every spare dollar has been pointed at KiwiSaver.
Legal and conveyancing
Expect roughly $1,500–$3,000 for a straightforward purchase, more if the title is complex, there is a flat or cross-lease issue, or negotiations run long. You pay even if the deal falls over after work has been done.
Due diligence reports
Building reports and LIM reports often run to several hundred dollars each. In a competitive market you may commission reports on more than one property. Budget for repetition, not a single perfect attempt.
Insurance, rates and moving
House insurance is usually required from settlement. Rates and, for some homes, body corporate levies begin immediately. Movers, bond on a rental you are leaving, and a week of takeaways while the oven is disconnected are mundane and real.
Two of these deserve more attention than they usually get. Insurance must normally be in place from the moment you go unconditional, not from the day you move in, because risk passes to you earlier than possession does — and your lender will want to see the policy before releasing funds. Rates and body corporate levies are also apportioned at settlement, so if the seller has already paid the quarter, you reimburse them for the part of it you will occupy. Neither is large on its own, but both are due in the same week as everything else.
The costs that only appear on some purchases
A cross-lease or unit title adds legal work, because your lawyer has to read documents an ordinary freehold purchase does not have. A unit title also comes with a pre-contract disclosure statement and a body corporate whose long-term maintenance plan may signal a levy increase you would rather know about now. Older homes may need a methamphetamine test or an engineer's report. Rural or lifestyle properties bring water supply, septic and access questions that a standard building report will not answer. None of these are unusual; they are simply not on the generic checklist.
Bank and valuation fees
Registered valuations are often required for high-LVR lending, and the lender may insist on one from its own approved panel rather than accepting a report you have already paid for. Application, documentation and security registration fees vary between lenders and are sometimes waived as part of a cash contribution offer. Ask for the full fee schedule in writing rather than reading it for the first time in the loan documents.
Low-equity and product costs
High-LVR lending may carry a low-equity premium or fee. First Home Loan pathways include Lender's Mortgage Insurance. These are not “deposit” but they change the total cash and loan size you need.
Why lenders care about leftover cash
A buyer who arrives at settlement with zero liquid funds looks fragile. Lenders prefer evidence you can absorb a repair or a rate change. When you use the deposit planner, treat the target percentage as the floor and keep a separate line for buying costs — then save to both.
There is a second reason to hold cash back that has nothing to do with the bank. The first twelve months in a house tend to generate expenses the previous owner had already absorbed and you have not: a hot water cylinder at the end of its life, a heat pump that was never serviced, curtains for the rooms that came without them. Buyers who spend their entire buffer on the deposit often end up putting those costs on a credit card at a much worse rate than the mortgage they just took out, which is an expensive way to save a few thousand dollars at settlement.
A working method
Rather than guessing a single lump sum, build the number in three parts. First, the transaction costs you will definitely pay: legal fees, at least one building report, and your share of rates. Second, the conditional costs that depend on the property type and your deposit size: extra reports, a registered valuation, any low-equity charge. Third, a post-settlement buffer that stays untouched. Total those three, keep the figure beside your deposit target in the planner rather than inside it, and you will not discover the gap in the week you can least afford to.