27 Aug 5 Mortgage Myths That Could Be Costing You Money

5 Mortgage Myths That Could Be Costing You Money

When it comes to mortgages, there’s no shortage of advice.

Friends who’ve bought recently.

Family members who “know someone in banking.”

Social media.

The problem is that mortgage advice has a habit of being passed around long after it stops being true.

Here are five of the most common myths we still hear, and why believing them could end up costing you money or delaying your plans.

Myth 1: “I’ll just go with my own bank.”

It feels like the obvious thing to do.

Your salary goes into that account every month. They already know who you are. Surely they’ll have the best deal?

Not necessarily.

Every lender has different products, lending criteria and affordability calculations. One bank may be happy to lend more than another. Another might offer a better interest rate. Some are more flexible with self-employed applicants or buyers with unusual circumstances.

Your own bank might still be the right choice.

The point is that you won’t know until you’ve looked at the wider market.

Myth 2: “I need a 20% deposit.”

This catches out a lot of first-time buyers.

Many people spend years trying to save a deposit that’s far bigger than they actually need.

In reality, there are mortgage products available with much smaller deposits, depending on your circumstances. Some buyers can purchase with as little as 5%, while others may have access to specialist schemes that reduce the amount needed even further.

A larger deposit can often unlock better interest rates, but waiting years to reach an arbitrary number isn’t always the best financial decision.

Understanding what’s available today can help you make a much more informed decision.

Myth 3: “I’ll wait until my fixed rate ends before I do anything.”

This is one we see regularly.

People receive their renewal letter, put it on the kitchen side and tell themselves they’ll deal with it closer to the time.

Before they know it, the current deal has ended and the pressure is on.

The good news is that you can often start looking at your remortgage options up to six months before your existing deal expires.

That doesn’t mean committing to a new mortgage there and then.

It simply gives you more time to compare your options and avoid unnecessary last-minute decisions.

Myth 4: “I was declined once, so nobody will lend to me.”

A declined mortgage application can feel like the end of the road.

In reality, it often isn’t.

Every lender has its own criteria.

One lender may say no because of your employment history.

Another may be perfectly comfortable with it.

The same applies to credit history, self-employment, income structure and many other factors.

Being declined once doesn’t automatically mean home ownership is out of reach.

Sometimes it simply means the first lender wasn’t the right fit.

Myth 5: “If the bank says I can borrow it, I should.”

This might be the biggest myth of all.

Lenders assess whether they believe you can afford a mortgage.

That isn’t quite the same as asking whether you’ll enjoy living with those repayments every month.

Buying at the very top of your budget might mean saying goodbye to holidays, struggling with unexpected expenses or feeling anxious every time another household bill arrives.

Sometimes the better financial decision is choosing the house that still leaves room to enjoy your life.

After all, your mortgage shouldn’t become your entire lifestyle.

The Bottom Line

The mortgage market changes all the time.

Products change.

Criteria changes.

Interest rates change.

Unfortunately, the myths tend to stick around.

If there’s one thing worth taking away from this, it’s that assumptions can be expensive.

Whether you’re buying your first home, moving house or thinking about your next remortgage, taking a little time to understand what’s actually true today could save you both money and unnecessary stress.