The Mortgage Traps That Could Cost You More Than You Expect

When it comes to home loans, the excitement of getting approved can sometimes cloud your judgment. But choosing the wrong mortgage can lead to costly mistakes that add up over time. Here’s how to spot the mortgage traps that could cost you more than you expect:

1. Introductory (Honeymoon) Rates That Jump Later

A low introductory rate can be tempting. However, what many don’t realize is that it’s often a short-term offer—usually 6 to 12 months—and the rate can jump significantly after that period. Always check what the rate will revert to once the promo ends, and see if it’s competitive in the long run. This is one of the common mortgage traps to watch out for.

2. Hidden Fees and Charges

Interest rates aren’t the only thing that impact your loan’s total cost. Application fees, annual package fees, settlement fees, and valuation fees can easily be hidden in the fine print. Also, keep in mind that some brokers charge clients fees for their mortgage services, while others don’t. Make sure you know exactly what you’re paying for and ensure you’re getting value for those fees. Always get a breakdown of all fees before signing to avoid mortgage traps.

3. Choosing the Wrong Loan Structure

A fixed-rate loan might seem like a safe choice, but it could limit your flexibility if interest rates drop or you want to make extra repayments. On the other hand, an offset account or redraw facility might give you better flexibility and save you money in interest. Picking the wrong structure could mean missed opportunities to save and fall into mortgage traps.

How I Can Help

As a Mortgage Broker and Buyer’s Agent, I’m here to help you navigate these potential mortgage traps and find the right home loan or property strategy that works for you. I work with a range of lenders to find the best rates and loan structures that suit your needs.

I don’t charge my clients fees for the mortgage side of my services. For a full description of the fees I charge as a buyer’s agent, please visit my Fees and Charges page on my website under the Our Services section.

If you’re unsure about your current home loan or thinking of buying soon, let’s chat! I offer a free, no-obligation mortgage health check or strategy session.

📩 Contact me today and let’s make sure you’re on the right path and avoid any mortgage traps.