TOP 10 MORTGAGE TIPS FOR YOU IN 2025
High interest rates in 2025 mean things will stay challenging for a while, so it’s crucial to ensure your mortgage works in your best interests and meets your needs.
Here are our top 10 tips to help you stay on top of your mortgage in 2025:
1. Plan for High Repayments
Especially if you’re rolling off a fixed rate to a variable rate this year, calculate your potential repayments early. Start budgeting now to ease the transition. Test out this new budget before your fixed rate ends so you’re better prepared. Here’s our repayment tool to help you with this:
2. Understand Assessment Rates
Banks assess borrowing capacity using a buffer—typically 3% higher than the actual interest rate. With high rates, this impacts how much you can borrow. However, some banks offer lower buffers (e.g., 1% for refinances), so it’s worth exploring options that might work in your favor.
3. Keep an Eye on Property Valuations
When refinancing or topping up your loan, your property’s current value matters. A lower valuation could mean extra costs like Lenders Mortgage Insurance (LMI) if your loan-to-value ratio (LVR) exceeds 80%. Staying informed about your equity position is key. We have access to RP Data and other Property valuation tools, so let us help with that if need be.
4. Seek Help if Facing Hardship
If you’re struggling financially, contact your broker or bank immediately. Banks have teams dedicated to assisting clients through tough times. They can offer interest only terms, repayment pauses and all kinds of assistance.
5. Make the Most of Offset Accounts
Offset accounts reduce the loan balance that interest is calculated on. For example, $20,000 in an offset against a $500,000 loan means you’re paying interest on $480,000. Use your offset for everyday banking to save on interest and explore lenders offering multiple offset accounts to manage savings goals effectively.
6. Review Unused Accounts and Debts
Unused bank accounts, credit cards, or expensive car leases could be costing you more than you realize. Close or consolidate them to reduce fees and improve your borrowing power. You can also refinance car loans or consolidate debts into your home loan to save.
7. Keep a Cash Buffer
If you’re buying property, ensure you have savings left over for unexpected costs. With the cost of living on the rise, having a buffer will give you peace of mind.
8. Monitor Your Credit Score
Stay on top of repayments and limit credit inquiries. Setting up direct debits for utilities and loans helps prevent missed payments, which can harm your credit score.
9. Review Your Loan Structure
Your loan structure affects your interest rate and repayments. For example, interest-only loans often cost more over time than principal-and-interest loans. Review your setup regularly to ensure it still fits your circumstances.
10. Scheduled Rate Reviews
At Black & White Finance, we check in with clients annually to ensure they’re on the best rate and loan structure. We’ll also touch base before your fixed or interest-only period ends to guide you through your options. If you’re bank or broker isn’t doing this, then you may need to add these milestone dates to your calendar so you don’t forget.
We work hard to maintain strong relationships with over 30 lenders to ensure our clients get the best terms possible in this high-interest-rate environment.
Let’s tackle 2025 together with confidence.