Building a home: What are the hidden costs?

Building a home can be an enticing option for many Australians, but there are plenty of unforeseen costs that can come into play. What comes included in a contract for one builder might be an optional extra for another, and there’s always the chance the overall price ends up several thousand dollars more than expected. Below are just a few things to keep in mind when drawing up your budget.

Soil and contour tests

Before building on a piece of land - in fact, before even planning to build - you’ll have to conduct a soil test. This will tell you how reactive the soil is (how likely it is to move, expand or contract with moisture), which you’ll need to know to determine how much weight it can support.

If it turns out the site you’re building on has sub-optimal soil - that is, it’s prone to above average levels of ground movement - a lot more work will need to be done to secure your home’s foundation, which will drive the overall cost up.

Another pre-build requirement is the contour test, which determines the slope of the land. Generally speaking, a sloping site is much harder to build on than a flat one (drop edge beams will be needed to prop up the floor slabs, and in some cases a specialist might need to be called in) so the cost will be greater.

Site preparation

Besides soil and contour tests, there are a few more costs involved in preparing the site for construction. These include connecting utilities (gas, water, electricity, and a sewer system), building retaining walls, and temporarily closing off roads if necessary. If you’re building in an area that’s prone to bushfires or flooding, this will also require more work.

Temporary site requirements

If you’ve walked past a house mid-build, chances are it was surrounded by temporary fencing and contained some combination of bins, portable toilets and other equipment. These will need to be hired by the building company, so make sure to ask if they’re included in the quote.


To avoid paying more than you have to, try to stick to the plan as drawn up in your contract. While builders provide a reliable estimate of the cost of materials and labour required to build your home, any modifications made midway through construction will throw a spanner in the works.

The team at WA Country Builders recommend having a clear idea of how much you want to spend on upgrades from the get-go and discussing any changes you want to make with your builder before the construction phase.

“Before you sign up, and just at that pre-start stage, it’s very easy to make changes to a plan and it won’t cost a lot, unless you’re adding things in. If you’re taking things out, you’re getting money back,” they said.

“If you then get to a point where you start making these changes whilst you’re out on site, the builder will charge you for it because it’s disrupting the progress, and we’ll have to stop trades, we’ll have to order materials.”

It also pays to remember that some things are much easier to add later on than others. For example, cosmetic changes, such as replacing a bench top you’re not too happy with, are a lot easier to make than reconfiguring plumbing and electricity after they’ve already been installed.

Driveways and landscaping

It’s not uncommon for building contracts to exclude anything outside the building, which means you might need to organise to have the driveway poured and landscaping done once construction of your home is complete. Alternatively, you can hire specialists who can liaise with the builders throughout the construction process and commence work at a later date. 

In the end, it’s in your best interests to chat with your builder and find out which services are included in the quoted price and which aren’t. If it turns out you’ll have to pay extra for certain features, find out the cost upfront so you can fit it into your budget. 

And if you’re after a loan to help kick start construction of your dream home, visit our home loans comparison page for a look at what’s available.

Home loan comparisons on Mozo - last updated 20 April 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Flex Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a.
    fixed 3 years
    6.37% p.a.

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.