When it comes to mortgages, there is no shortage of advice.
Friends, family, social media, headlines, and even banks themselves all seem to have an opinion on what you should do.
The problem is that a lot of this advice is built on myths that sound logical but can quietly cost you tens or even hundreds of thousands of dollars over time.
We see these mistakes every single week.
Smart, capable people who have worked hard to get ahead, only to realise later that their mortgage was set up in a way that limited their options or worked against their long-term goals.
So let’s bust some of the biggest mortgage myths we come across and more importantly, talk about what actually matters if you want a mortgage strategy that supports your future.
Myth 1: The Lowest Interest Rate Is Always the Best Deal
This one feels like a no brainer. Of course you should chase the lowest interest rate, right?
Not necessarily.
Focusing only on the rate often leads to poor loan structure, and we can’t tell you how often people come to us after doing a DIY refinance thinking they’ve won, only to discover their loan is completely misaligned with their long-term plans.
A great mortgage strategy is about far more than shaving a tiny fraction off your interest rate.
The right structure can save you far more over time through flexibility, tax efficiency, risk management and your ability to hold property long term.
We regularly see people with multiple properties whose loans have structural flaws that limit their borrowing capacity or future options.
A short conversation upfront would have saved them years of frustration and thousands of dollars.
Instead of obsessing over the rate alone, you should be looking at things like:
- How the loan is structured
- Whether offset accounts are used correctly
- Repayment flexibility
- How the loan supports your future plans, not just today
Sometimes the “cheapest” loan on paper ends up being the most expensive one long term.
Myth 2: You Should Always Pay Off Your Mortgage as Fast as Possible
This is one of the most common pieces of advice we hear, and in some cases, it’s absolutely right.
If you’re certain you’ll live in your home forever, then paying it down aggressively can make sense. But life rarely follows a straight line.
If there is even a chance that your home could become an investment property one day, overpaying your loan can permanently reduce your future tax deductions.
Here’s why.
If you pour every spare dollar straight into your loan and later turn that property into an investment, the amount you can claim interest on is lower forever. You cannot undo that mistake.
Many people assume redraw will fix this, but that is not how the tax rules work. Once you pay down a loan, the purpose of that debt is locked in. Redrawing funds later for non investment purposes does not restore deductibility.
This is why offset accounts are so powerful. You still reduce interest, but you keep flexibility. If your plans change, your options are still open.
We always ask clients early on whether a home might become an investment one day.
Most people have never thought about it and that’s where the biggest irreversible mistakes happen.
Myth 3: Borrowing Capacity Is the Same With Every Lender
This one couldn’t be further from the truth.
Borrowing capacity can vary dramatically between lenders, sometimes by hundreds of thousands of dollars, even when nothing about the borrower changes.
Each lender has its own credit policy, calculator, and appetite for risk. They all treat income, expenses, debts, and different professions differently.
Some are generous with bonuses or overtime. Others are better for business owners. Some shade certain income types heavily. Some are stricter on living expenses, HECS debts, or credit cards.
This means a “no” from one lender can easily be a “yes” from another. Or the difference between buying an $850,000 property and a $1,000,000 one.
Choosing the wrong lender can quietly limit the quality of the home you buy, the suburb you live in, or whether you need to upgrade again later.
Those decisions affect real life, not just numbers on a page.
Myth 4: You Can Just Do All the Research Yourself
Technically, yes, you can.
In reality, most people underestimate how complex lender policy actually is until they are deep into it. There are dozens of lenders, each with constantly changing rules, niches, and credit behaviour.
Doing this properly takes time, experience, and context. It is not just about comparing rates. It is about understanding which lender suits your income type, your goals, your risk profile, and your future plans.
There is also a big difference between going directly to a lender and working with someone who sits on your side of the table.
Mortgage brokers have a legal best interest duty. Lenders don’t. A lender is not required to tell you if a competitor has a better option or if your structure is suboptimal.
On top of that, some lenders do not even accept direct applications. By skipping a broker, you automatically cut yourself off from part of the market.
And then there is the admin. Chasing documents, interpreting policy requests, fixing errors in loan offers, and escalating issues when things go wrong. That all happens more often than people expect.
Myth 5: Maternity Leave Means You Can’t Get a Loan
This myth causes a lot of unnecessary stress and thankfully, it is not true.
You absolutely can get a loan while on maternity or parental leave. The key is presenting the right story and documentation to the lender.
They want to understand your return to work plan, what your income will look like once you return, and whether you have sufficient savings to manage commitments in the meantime.
A return to work letter from your employer is crucial. Some lenders will even use your full returning income. Others may assess you more conservatively until you are back at work.
The point is, it is possible. It just requires planning and the right lender choice.
Myth 6: Loyalty to Your Bank Gets You the Best Rate
I wish this one were true, but loyalty often costs people money.
Banks regularly offer sharper deals to new customers, not existing ones. Unless someone actively negotiates or refinances, most people drift onto uncompetitive rates over time.
Banks rely on complacency and the perceived hassle of switching. That is why reviewing your loan every couple of years is so important.
Sometimes lenders will sharpen rates for existing customers, but often not to the same level offered to new ones. This is a commercial decision, not a personal one.
Blind loyalty rarely pays when it comes to mortgages.
The Real Takeaway
There is a lot of misinformation out there about mortgages, and much of it sounds convincing enough to lead people down the wrong path.
A great mortgage strategy is not about chasing the latest rate or copying what someone else did. It is about aligning your lending with your long term plans, your lifestyle, and your risk tolerance.
Get the strategy right first. Then get a great rate that supports it, not one that undermines it.
If you ever find yourself wondering whether your loan is set up properly, that instinct is worth listening to. Even a simple review can uncover opportunities most people never see on their own.
Your mortgage should work for you, not quietly against you.
For more information, listen to the Property Trio Podcast
Reach Out to Us
If you would like to discuss your next steps, property plans, and mortgage strategy, get in touch with us today. Our team of experts is here to guide you through the complexities of the market and help you achieve your property goals.
