Mortgage Myths That Could Be Costing You Money

When it comes to home loans, misinformation is everywhere. From what you “must” save for a deposit to the idea that your bank will always give you the best deal, some common mortgage myths could end up costing Bathurst and Lithgow buyers thousands of dollars. 

If you’re a first home buyer or a homeowner considering refinancing, it’s time to separate fact from fiction. 

Mortgage Myth 1: You Need a 20% Deposit to Buy 

Many first home buyers in Bathurst and Lithgow delay entering the market because they believe they can’t buy until they’ve saved a 20% deposit. While having 20% helps you avoid Lenders Mortgage Insurance (LMI), it isn’t the only option. 

Government initiatives like the Regional First Home Buyer Guarantee allow eligible buyers to purchase with as little as a 5% deposit — without paying LMI. On a $600,000 home, that’s the difference between saving $30,000 and $120,000. 

Mortgage Myth 2: Your Bank Will Always Give You the Best Rate 

It’s easy to assume your bank values your loyalty, but the truth is many banks reserve their best deals for new customers. If you’ve had the same home loan for years, there’s a strong chance you’re paying more than you should. 

A mortgage broker in Bathurst and Lithgow can compare 30+ lenders and negotiate on your behalf, often securing discounts or cashback offers that your current bank may not mention. 

Mortgage Myth 3: Refinancing Is Too Hard 

Some homeowners hesitate to refinance because they think the process is complicated, time-consuming, or not worth it. Refinancing could save you tens of thousands over the life of your loan. 

For example, refinancing a $500,000 loan from 6.3% to 5.9% could reduce repayments by over $120 per month. With the right support, refinancing is straightforward — and the potential savings are significant. 

Mortgage Myth 4: You Can’t Buy While Paying Rent 

Many Bathurst and Lithgow renters feel stuck, believing rent makes it impossible to save for a deposit. But with the right budgeting, use of government grants, and strategies like guarantor loans, breaking out of the rental cycle is possible. 

Every week you continue renting is money going toward someone else’s equity, instead of building your own. 

Mortgage Myth 5: Interest Rate Is the Only Thing That Matters 

While getting a sharp interest rate is important, it’s not the only factor in choosing a home loan. Features like offset accounts, redraw facilities, and repayment flexibility can save you money and help pay off your loan sooner. 

A slightly higher rate with better features could save you more in the long run. 

Busting Mortgage Myths With the Right Advice 

Falling for these common mortgage myths can delay your property goals or cost you thousands in unnecessary repayments. The good news? With the right advice, you can cut through the noise and make decisions that benefit your financial future. 

At Sparks Finance, we help Bathurst and Lithgow home buyers and homeowners: 

• Understand their real options 

• Compare 30+ lenders 

• Access government grants and guarantees 

• Structure their loans to build equity and reduce costs 

Don’t let mortgage myths hold you back. Whether you’re buying your first home, refinancing, or planning your next move, having an experienced mortgage broker on your side makes all the difference.