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Common Mortgage Mistakes to Avoid

Many mortgage mistakes aren't dramatic — they're small oversights that quietly add cost or stress over time. Here are some of the most common ones, and simple ways to avoid them.

Borrowing to Your Absolute Limit

Just because a lender approves a certain loan amount doesn't mean it's comfortable to repay. Borrowing right up to your maximum can leave little room for interest rate rises, unexpected expenses or changes in income. It's worth using a mortgage calculator to check how your repayment would look at a higher interest rate, not just today's rate.

Forgetting About the Extra Costs of Buying

Stamp duty, conveyancing, inspections and moving costs are easy to underestimate. Buyers who budget only for the deposit and repayment can be caught short at settlement. Our First Home Buyer's Guide walks through these additional costs in more detail.

Not Comparing Loan Features, Only the Rate

The lowest advertised rate isn't always the cheapest loan once fees, offset accounts, redraw access and flexibility are considered. Comparing the total package — not just the headline rate — tends to give a more accurate picture of which loan actually suits you.

Never Reviewing the Loan After Settlement

It's common to set up a mortgage and then not look at it again for years. Rates, fees and features change over time, both at your own lender and across the market. Periodically checking whether refinancing makes sense, or simply asking your lender for a better rate, can prevent quietly overpaying for years.

Ignoring the Impact of Loan Term

A longer loan term lowers your regular repayment but increases the total interest paid. Some buyers default to the longest available term without realising how much extra interest that adds up to over time. Understanding how repayments are calculated makes this trade-off much clearer.

Not Using Extra Repayments or Offset Features

Loans with offset accounts or redraw facilities are only useful if they're actually used. Some borrowers pay for these features but don't take advantage of them, missing out on potential interest savings. If you have access to these features, it's worth understanding how to use them, covered in our guide on offset accounts vs redraw facilities.

Making Big Financial Changes Before Settlement

Changing jobs, taking on new debt, or making large purchases shortly before your loan settles can affect your final approval, even after pre-approval has been granted. It's generally wise to keep your financial situation as stable as possible between application and settlement.

Test a few different loan scenarios with the Smarter Mortgage Calculator before you commit.