Top of main content

Understanding mortgage costs

How much does it really cost to buy property in Bermuda?

When it comes to buying a property, one thing you'll hear a lot about is the unexpected costs. These can come in a number of forms, from legal fees and insurance to the practical costs involved in the physical act of moving.

At HSBC, our goal is to make your mortgage journey as simple and transparent as possible. Before you start the process, make sure you've looked into these common costs and made provision in your budget.

The most common costs to be aware of include:

  • property appraisal

  • legal fees

  • land tax

  • negotiation fee

  • insurance

  • moving costs

What is a property appraisal?

A property appraisal is a professional evaluation of the condition of your intended home. It is used to determine the current market value of the property and to identify any potential issues such as structural damage, water damage or poor maintenance by the previous owner.

Remember, if your home needs repairs after you've bought it, the cost may far outweigh the initial price of conducting an appraisal. Identifying any issues beforehand could help you negotiate a lower price, or even give you an opportunity to reconsider whether you really want to buy the property.

When you take out a mortgage with us, we'll ask you to instruct an HSBC-approved property appraiser to carry out this evaluation on the property you are planning to buy. You will have an opportunity to select an appraiser at your first appointment with your HSBC mortgage specialist. The fee for this service is generally in the region of $500 to $850.

What are legal fees?

After you've been pre-approved for a mortgage, you'll be asked to instruct a lawyer to handle various aspects of the application process on your behalf.

This includes creating and processing all of the required paperwork and documentation, such as your Sales and Purchase agreement, and also carrying out any necessary enquiries. The charge for these services will vary from one law firm to another, but you should be able to get a quote during your initial consultation.

Before you instruct a lawyer, please ensure that the firm is on HSBC's List of Permitted Law Firms. Our full list is available from any HSBC Branch and is updated monthly.

What is land tax?

All homeowners are required to pay land tax twice yearly. Your land tax rate is based on the annual rental value (ARV) of your property, and is calculated by the Office of the Tax Commissioner.

You must pay land tax if you're:

  • the sole proprietor of a property

  • a life tenant in a property

  • a leaseholder for three or more years

  • a periodic (yearly or monthly) tenant of property owned by the Government of Bermuda

You can discover more about land tax rates on the Government of Bermuda’s official website

What is a negotiation fee?

A negotiation fee is what you pay a lender to arrange and process your mortgage. It's sometimes known as a lending fee.

The negotiation fees you'll incur when you take out an HSBC mortgage will vary depending on your account status and the nature of your loan. You can review our fees on our account fees page.

What kinds of insurance do I need?

Before your mortgage agreement can be finalised, you'll need to purchase buildings insurance for your property. This protects you against the cost of repairing or rebuilding your home, should it become damaged. 

You also have the option to purchase home contents insurance and mortgage protection insurance, although this can be done at any time and is not required to complete your mortgage application. 

Home contents insurance protects the contents of your home in case of fire, flooding, theft or other potential risk factors. This can include your furniture, appliances, clothing and other possessions. 

Mortgage protection insurance offers protection for your family by repaying the outstanding balance of your mortgage in the event of your death.  

You can buy your home buildings, home contents and mortgage protection insurance from HSBC, but you're also free to purchase from a third party provider if you prefer. 

What are moving costs?

One of the final expenses associated with buying a new property is the physical cost of moving. It's likely that you'll need to hire a trucking company to transport your furniture and other belongings to your new home. If you are moving a lot of large furniture, or transporting your goods from overseas, this service may come with considerable costs.

You may also be interested in

Our step-by-step guide to your mortgage journey, from the first application to getting your keys.

Switching your mortgage to a new rate could help you to save money and benefit from more favourable lending terms.

Discover everything you need to get on the property ladder with your very first home.