What owning it costs, beyond the loan
Buyers budget for the repayment and are surprised by everything else. Council rates, strata levies, insurance, water and the maintenance a property quietly demands are all real, recurring and entirely predictable. This puts a monthly figure on them before you commit rather than after.
Where the numbers come from
Council rates and water are usually disclosed in the contract or available from the council. Strata levies are in the strata report, which also shows the levy history and whether a special levy is looming. Insurance you quote yourself, and it is worth doing before you commit on anything near a bushland interface or a flood-prone area, where premiums can be materially higher than expected.
The maintenance allowance
The rule of thumb is around one per cent of the property's value a year for a freestanding house, covering everything from gutters to a hot water system that eventually fails. For a strata property it is lower, because the building itself is maintained through your levies, so the allowance covers only what is inside your walls. Neither figure is a prediction; both are a reasonable provision.
Why lenders care too
Some lenders include an allowance for property running costs in serviceability, particularly strata levies, which is one of several reasons an apartment with high levies can reduce what you can borrow. Where levies are unusually high, they are worth raising before an application rather than discovering their effect on the borrowing figure afterwards.
What this does not include
The mortgage repayment itself, which the repayments calculator covers, and the one-off costs of buying, which the cost of buying calculator covers. Together the three give you the complete picture: what it costs to buy, what it costs to borrow, and what it costs to own.
Working out what you can genuinely afford?
Charles can put the running costs beside your borrowing figure so the budget is the real one.
Ownership cost questions
How much should I budget for maintenance?
Around one per cent of the property's value a year is the widely used allowance for a freestanding house, less for a strata property where the building is maintained through levies. In some years you will spend nothing and in others a hot water system and a fence will arrive together, which is precisely why it is provisioned rather than budgeted exactly.
Are strata levies negotiable?
No, they are set by the owners corporation based on the building's budget. What you can do is read the levy history and the sinking fund position before you buy, because a building with an inadequate sinking fund is a building where a special levy is more likely.
Do these costs affect how much I can borrow?
They can. Some lenders include an allowance for property running costs, particularly strata levies, in their serviceability assessment. High levies on an apartment can therefore reduce your borrowing capacity as well as your monthly budget.
What about land tax?
It generally does not apply to your own home in NSW, but it can apply to investment property above a threshold. It is a state tax with its own rules and thresholds, and it is a question for your accountant rather than your broker.
Should I include these in my loan application?
The lender will ask about your living expenses and will form its own view, comparing what you declare against your bank statements. Being realistic helps you as much as them: a repayment that only works if nothing ever breaks is not a repayment that works.
Related tools and guides
Estimates only, not credit or financial advice. This tool uses general assumptions and cannot see your credit file, verify your income or apply any particular lender's policy. Your position is confirmed in a full assessment.
Budget for the whole thing, not just the loan.
Twenty minutes with Charles: your borrowing figure alongside the real running costs, so the number you plan on is the number that holds. Free, no credit check.
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