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While many borrowers have not been deterred from their home ownership aspirations despite economic headwinds, securing the best deal possible can still be challenging.
As such, members of the broking industry have highlighted how borrowers can take full advantage of all the options available to them and get the most out of their mortgage offering.
Home Loan Experts senior mortgage broker, Preeti Kowshik, outlined five key strategies to help borrowers lock in better mortgage deals in 2025.
“Expanded CCR compliance in 2025 means maintaining strong repayment habits is more critical than ever,” Kowshik said.
“Small missteps can now carry big consequences.”
Borrowers should be aware that even minor defaults or late payments can heavily impact creditworthiness, as lenders now review repayment behaviour, credit inquiries, and outstanding debts over a two-year period.
Kowshik recommended clearing up your credit file, limiting unnecessary credit inquiries, and consolidating debt to improve credit standing.
As interest rates fluctuate in 2025, borrowers will need to carefully consider whether a fixed or variable-rate loan best suits their financial situation.
“Monitoring rate trends and seeking help from brokers can make a difference in securing favourable terms,” Kowshik said.
Understanding the pros and cons of each option is crucial, especially as higher rates continue to affect affordability checks.
Kowshik also highlighted the importance of financial stability in an uncertain economic climate.
“Economic uncertainties have heightened the need for steady income streams and prudent financial management,” she said.
In 2025, lenders are likely to favour applicants with stable employment and minimal liabilities. Staying in the same job and residence for at least 12 months can significantly boost one’s chances of securing a favourable deal.
Getting pre-approved for a mortgage can also help streamline the buying process, but Kowshik cautioned against multiple pre-approvals with different lenders, as this can harm a borrower’s credit score.
A good broker can identify the best chances for pre-approval, limiting the number of credit inquiries and protecting the borrower’s credit score, according to Kowshik.
Finally, Kowshik advised borrowers to focus on building a strong foundation by saving for a deposit of at least 20 per cent. This not only reduces the loan-to-value ratio (LVR), but also helps avoid Lenders Mortgage Insurance (LMI).
A larger deposit signals financial stability and can strengthen a mortgage application.
“With rising interest rates and inflation, lenders are exercising greater caution. A solid deposit demonstrates commitment and reduces perceived risk,” Kowshik said.
Furthermore, insights published by Mortgage Choice, outlined how setting up an offset account could yield a plethora of benefits for borrowers and make home ownership more achievable.
Mortgage Choice broker Paul Williams said that around 60 per cent of his clients opted for a home loan that featured an offset account and explained the benefits of depositing into these accounts.
“Most banks impose a slightly higher interest rate for offset accounts compared to basic home loan packages, along with monthly fees ranging from $10 to $30,” he said.
“So, if you’re not actively depositing money and making the offset work for you, it might not be worth it.
“Ideally you’d want to maintain a balance of at least $20,000 or $30,000 to make it worthwhile. Otherwise, you might be better off opting for a basic variable home loan rate, which could be about 0.2 per cent cheaper.
“Offsets can be fantastic, but only if you utilise them well.”
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