What does it cost to buy a home with Islamic finance? A checklist

At a glance

• Stamp duty and government fees are set by each state and territory, not by the type of finance you use.
• On selected Ijaar home finance, a risk fee may apply. It's included within the amount financed, not added on top.
• First home buyers may be able to get state help, but our finance is not part of the Home Guarantee Scheme.
• To compare the overall cost, read Is Islamic home finance more expensive?

What's on the buying costs checklist?

Use this list to ask the right people for figures before you make an offer.

What purchasing costs should you plan for?

• Stamp duty or transfer duty. Each state's or territory's revenue office sets it, and it usually depends on the price, the location and your circumstances. Concessions may apply to some buyers.
• Legal and conveyancing fees. Your solicitor or conveyancer checks the contract, does the searches and coordinates settlement.
• Government registration fees. These cover registering the transfer of the property and the financier's mortgage on the title.
• Building and pest inspections. Arrange them before you commit, so you know about problems early.

What does the finance itself cost?

• One-off fees, such as valuation, establishment and settlement fees.
• A risk fee. On selected Ijaar home finance, depending on how much you finance compared with the property's value, a risk fee may apply. It's included within the amount financed, not added on top.
• Ongoing fees, such as account fees and fees for features like redraw or a Cash Management Account, available on selected Ijaar home finance.
• The rental rate. With Ijaar home finance you pay a rental rate, not an interest rate. It can be variable, or fixed for a period on selected Ijaar home finance.

We don't publish rates on this website. An accredited broker can give you current rental rates and help you compare the total cost, including fees.

What insurance do you need?

Conventional building insurance is required for the property. Your insurer or broker can explain the cover and what it costs.

How much of your own money will you need?

You'll need your own contribution towards the price and the purchasing costs. How much depends on the property, how much you finance compared with its value and your financial situation. Your broker will explain what applies to you.

What costs come after settlement?

• Moving costs, such as removalists and connecting utilities.
• Council rates and water rates.
• Strata levies, if you buy a unit or townhouse in a strata scheme.
• Maintenance and repairs.

What help is there for first home buyers?

• The First Home Owner Grant. Each state and territory sets the grant, its eligibility and its amounts, usually for new homes, and not everyone is eligible. Where a grant is available in your state or territory and you're eligible, it can be applied for as part of your finance application on selected Ijaar home finance.
• Stamp duty concessions. Each state and territory sets these. Your solicitor, conveyancer or state revenue office can confirm whether you're eligible.
• Government guarantee schemes. Our finance is not part of the Home Guarantee Scheme.

Our guide for first home buyers covers the steps to buying your first home.

What extra costs apply to foreign buyers?

Foreign persons, including most temporary residents, usually need foreign investment (FIRB) approval, and foreign buyer rules apply. The Australian Government has a temporary ban on foreign persons buying established homes, with limited exceptions. Many states and territories also charge extra duty for foreign purchasers, so check with your state revenue office. New Zealand citizens generally aren't treated as foreign persons for residential property.

We don't offer finance to non-residents. Selected Ijaar home finance accepts some temporary visa holders living in Australia, and some Australian and New Zealand citizens and Australian visa holders living overseas.

What are the pros and cons of Islamic home finance on cost?

Possible pros

• The same consumer protections as other regulated credit, including hardship help and free external complaints through AFCA.
• Finance structured around rental on a real asset, not riba.

Possible cons

• Approval isn't certain: every application is assessed against credit criteria.
• A variable rental rate can change, and fees and charges apply, so compare the total cost, not just the rate.

How do you work out your buying costs, step by step?

1. Talk to a broker about your budget. If you don't have a broker, contact us and we can refer you to an accredited broker.
2. Ask your broker for the finance fees and current rental rates in writing.
3. Check stamp duty, concessions and grants with your state revenue office, solicitor or conveyancer.
4. Get quotes for conveyancing, inspections, building insurance and moving.
5. Add it all up, together with your own contribution, before you make an offer.

How can Riyadh Financial Services help?

Riyadh Financial Services arranges Shariah-compliant property finance through accredited mortgage brokers. Accredited brokers must act in your best interests under Australian credit law (the best interests duty), and they work across Australia, in person or online.

• Ijaar home finance for buying a home to live in or an investment property.
• Help with the First Home Owner Grant application for eligible first home buyers, on selected Ijaar home finance.
• Refinancing to Ijaar home finance. Our guide to the costs of refinancing explains what's involved.

Our product structures are reviewed by our independent Shariah adviser. Ask us for the current Shariah certificate and what it covers. We don't give religious rulings, and you're always welcome to seek your own scholar's view.

Keep reading:Is Islamic home finance more expensive? · The costs of refinancing to Islamic home finance · Ijaar home finance

Costs by state:New South Wales · Victoria · Queensland · Western Australia · South Australia · ACT · Tasmania · All state guides