News Corp Australia
First published 25 Aug 2025, 9:53am
Real Estate
Making a mistake at the home loan stage of a property purchase can be costly.
ANALYSIS
Did you know one in three borrowers said it took five years or more to save their home loan deposit? That’s a long time preparing to buy property, but new research reveals that when it comes to choosing their home loan, many borrowers wish they’d done things differently.
That’s according to the latest Mortgage Choice Home Loan Report, which surveyed 1000 Australians and showed that 57 per cent of borrowers wish they’d done more homework when choosing their first home loan, and 62 per cent suspect there was probably a better deal they missed out on.
Mistakes respondents made when choosing their first home loan included: assuming all home loans are basically the same (18 per cent), focusing too much on rates (18 per cent), failing to consider how their needs might change in the future (18 per cent).
So, how can you avoid home loan regret?
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Anthony Waldron, CEO of Mortgage Choice
Get home loan advice before you find the property
Mortgage brokers tell me that many first time buyers will wait until they’ve found the property they want to buy to start looking at their home loan options, but that can lead to rushed decisions. By getting advice while you’re building your deposit, you can understand the home loan basics to make an informed decision. And, when you’re ready to buy, having pre-approval will help so you can make an offer or bid with confidence.
Get clear on how much you can borrow
As a starting point, ask yourself how much you have in savings. Are any cash gifts part of your deposit? Are you eligible for Government grants or schemes? And can you access equity from an investment?
What first time buyers often don’t realise is that each lender has a different way of calculating borrowing power, so the same person could qualify for different amounts with different lenders.
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A broker can help you calculate your borrowing power and help you understand if you’re eligible for Government grants.
Understand home loan products and features
While choosing a home loan with a competitive interest rate is important, the type of loan and the features it offers are equally important and might even help you pay down your loan sooner.
For example, a home loan offset account is a savings account attached to your home loan. The savings you keep in that account will help offset the interest you pay on your home loan. Similarly, a redraw facility allows you to make extra repayments to your home loan that you can access later.
Diligence when choosing a mortgage requires good preparation.
You’ll also need to decide whether you want a home loan with a variable rate that changes in line with the market, or a fixed loan with a locked in rate for a set number of years.
There’s a lot to consider, which is why it’s a good idea to think about whether your home loan suits not just your immediate needs, but your long-term needs.
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Buying your first property and applying for a home loan can be an emotional journey. To make decisions with a clear head and avoid emotional triggers that can lead to rushed decisions, factor your home loan into your buying plan.
Anthony Waldron is Mortgage Choice CEO.
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