Common mortgage mistakes first‑home buyers still make in 2026

Many first home buyers are still making avoidable mortgage mistakes that can impact their finances for years. Here’s how to avoid the most common pitfalls, like skipping pre-approval, underestimating costs, and choosing unsuitable loan types. There are also practical tips you can use to navigate the home loan process with confidence and avoid costly errors.

Why first home buyers still struggle in 2026

Here at Intuitive Finance, we talk with first home buyers every day, and sadly, we see many of them struggling with the same mistakes that similar buyers have done for years.

Market pressures and decision fatigue

Despite some initial decreases, interest rates plateaued in 2025, after five years of ups and downs. But unfortunately, house values have risen in most capital cities, especially Brisbane, Adelaide and Perth.

As a result, FOMO market pressure is still high. The traditionally extra busy spring season has also just begun. As a result, nervous first-time buyers are undergoing emotional, or decision, fatigue.

Information overload and misinformation

Friends, family, and websites can overload you with well-meaning advice. But this advice can be misinformed, biased or just plain wrong. As mortgage brokers, we see this happen all the time. Luckily for you, we can ensure you receive the right advice and tips, that are also perfectly aligned to your exact financial and other needs.

Top mortgage mistakes to avoid

Loan pitfalls are easy to succumb to, regardless of the overall property market and season. But they can easily be avoided too.

Not getting pre-approved

Pre-approval can seem like an annoying, stressful step in the buying process. But it can reassure vendors and agents that you’re serious about buying, and that you have the funds to pay for a home. Pre-approval can also help you, as you will know exactly how much you can spend on a property. You also won’t waste time looking at homes that you can’t afford.

Underestimating upfront and ongoing costs

Upfront costs include stamp duty; conveyancing and other legal fees; and mortgage application fees including title transfer costs.

I should note that first home buyers may be able to avoid stamp duty fees, thanks to government concessions, and mortgage application fees are usually built into your home loan. Then there’s ongoing costs such as council rates, utility fees, body corporation fees, home and contents insurance, and possibly, lenders’ mortgage insurance. Unexpected maintenance issues can also crop up.

Picking the wrong loan type

While it’s tempting to pick the loan with the lowest interest rate, doing so can cost you decades of wasted money.

Fixed vs variable mistakes

A fixed rate loan gives you security from interest rate changes, but no flexibility especially when it comes to great savings opportunities such as offset accounts and redraw facilities.

With variable rate loans, your rates will change according to Reserve Bank of Australia decisions. But you will enjoy flexible inclusions such as offset accounts, redraw facilities and the option of making extra repayments.

Both loan types have risks and benefits but the best one for you is ultimately up to your financial status and your property goals. But be aware that whichever loan you choose, it will impact your long-term finances.

Ignoring offset or split options

These options also have risks and benefits but they’re still worth investigating as again, they can save you money.

In fact, you may already have an offset account without realising it. These everyday savings accounts just need to be linked to your variable home loan to make a major difference to your finances.

Meanwhile, split loans are a great compromise between fixed and variable loans, offering the best – and worst – of both worlds.

Smart strategies for first home buyers

There are many easy and practical ways that first home buyers can use to avoid typical mistakes.

Work with a trusted mortgage broker

Brokers can not only give you a wealth of smart advice and support but they can also do the hard yards for you when it comes to finding the best lender and loan, specifically for your situation.

Use loan calculators and budgeting tools

A realistic budget is crucial to your home loan’s success and as a first home buyer, many costs and fees such as council rates will be new to you. This is particularly the case for long-term renters, who have always relied on their landlord to fix and pay for such bills.

So calculate and budget as much as possible – and long term too – before signing off on a loan. Consider paying more than your lowest possible mortgage repayment – which even with a fixed loan, can sometimes be done – and pay it every week, not every month. Allow funds for unexpected maintenance problems, and save as much as you can. Your future you will thank you.

Final thoughts

It’s hard not to be nervous and afraid when buying your first home. After all, this property is the costliest item you’ve ever purchased and there are a substantial number of details that you need to know and understand, along with major pressure too. But be kind to yourself as well and know that you’re not alone in this situation.

Learn from others’ mistakes

As with any big situation in your life, you don’t want to make the same mistakes that others do. So, talk to your friends and family – especially the ones in similar financial situations as you – about their home purchases as well as their loans and similar details such as maintenance issues.

Hopefully, some will be honest enough to tell you how and why they’ve messed up some of their property journey. Listen to these people and be smarter at how you handle your purchase.

Set yourself up for long-term success

Unexpected issues – such as a global pandemic – can happen. But buying for the first time doesn’t have to be all about stress and fear. With a mortgage broker beside you and plenty of smart logic within you, you can enjoy long-term property success.

So, whether you’re just starting to save for your first home, or on the verge of buying one, give us a call and let’s have a chat.

Avoid costly first-home loan mistakes – get expert advice today and buy your home with clarity and confidence.

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Andrew Mirams

Andrew Mirams is the Founder and Managing Director of Intuitive Finance, a highly respected and multi-award winning Mortgage Brokerage dealing with clients all over Australia and around the world. Andrew has over 30 year’s experience in the finance industry and has assisted clients to secure over $2 Billion in mortgage lending over his time. Intuitive Finance deals with all aspects of lending from helping first homebuyers, someone wanting to upgrade their home or starting out and experienced investors looking to secure that next investment property, we can assist with all those requirements. We also specialise in working with self-employed clients and getting them the best outcomes, along with Commercial and Asset finance solutions. Intuitive Finance is highly regarded in the industry and has been recognised as a national winner of the MFAA customer service award and also one of the finance industry’s top mortgage employers. Our brokers also feature regularly in the Top 100 mortgage brokers list in Australia.