Home buying mistakes to avoid

Are you sometimes a little rash when making big decisions? Or are you a careful planner that researches for hours, days, months before making an important move like buying a house?

We know that you’ve worked super hard to get into the comfortable position of buying. Now that you are, with the right guidance you can achieve your goals a lot easier and with a lot less stress. We’ll explore a few strategies that you can use to avoid making disastrous mistakes when buying a home. Let’s go!

Home Loan Comparison Table - last updated 13 August 2022

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  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% p.a.

    Affordable home loan rate for buyers or refinancers.. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 30% deposit required.

  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.


1. Get real

It’s one thing to look at the purchase price of a property you really really want. But have you considered everything else? We mean, stamp duty, deposit, strata levies? Not as simple as you think!

What if I don’t have enough for a deposit?

Let’s face it, if you don't have enough for a deposit, how do you think you can manage monthly repayments on a home loan? For thirty years? What about your basics like groceries, petrol and strata fees? All of these are regular financial commitments with no way out. But there is a way round the old deposit. Read on.

Can my parents be a guarantor for my deposit?

Yes. Any friend or relative can, however this is a risk they take. After all, if you forfeit your repayments, you risk your loved ones jeopardising their property. Think long and hard about whether you can manage a loan before dragging other people along with you!

Tip: If you’re struggling with a deposit of your own and need a guarantor, consider buying property for investment rather than to reside in. Do your research and pick a unit or house with high rental residual to help repay the majority of the loan back.

But what if rates go up and rents decrease? Ask a finance expert about trends in the market and the best next direction you need to take.

2. Buying blind

So there’s an excellent property available interstate. Looks good on paper, looks good in the virtual tours, the value for money is incredible and it’s already tenanted. But, you just don’t have time to fly over and inspect it so you buy it anyway. What could go wrong? Hang on a sec, did the virtual tour generously show you the handsome transmission tower standing RIGHT NEXT DOOR? No. Nor did the lovely and very helpful real estate agent tell you about it either. Duped!

Now you see why you need to inspect each and every property you are serious about purchasing? You can’t just part with hundreds of thousands of dollars in vain. That’s silly (carefully chosen words)! Buying without seeing the property first is like Tinder for houses. Except you marry the house, signed sealed and delivered instead of dating it first.

Physically inspecting a property is integral to the look and feel of the place and more. You can’t judge a book by it’s cover, and you sure can’t judge a house by it’s photos gallery. If you’ve ever been wooed by an online house profile, only to be disappointed upon inspection, then you ought to know the risks of purchasing without checking it out first.  

3. Big ears

It’s good hearing about people’s different experiences when it comes to investing. And there’s certainly a great mix out there. From positive to negative results and everything in between, you’ll hear it all. But who do you really heed advice from? How many ‘experts’ do you listen to before making a decision on how to buy property?

1. Your financial advisor might have an annoying snort to his laugh, which over the phone may echo in between your ears for a while.

2. Your mum’s best friend who just inherited a whole lot of money and has become an expert investor overnight.

3. Your uncle, who is definitely an ‘expert’ when it comes to investing in properties. After all, he started his portfolio 40 years ago and is still $2 million in debt because he chose to pay interest only for the life of the loan, so that he could strategically save up the principal over the course of time then pay it off in one lump sum. Cool. But did he? Nope.

So it looks like, the only person you should be listening to is the actual expert in this scenario. Option 1, the humble financial advisor with the awkward laugh. Swallow your ego just a little this time, as he or she could be saving you hundreds of thousands in the long run.

4. Limiting selection

You’re doing what?! Picking the best out of two houses is not going to get you anywhere! Limiting your selection will also limit your chances in buying the right house for your money. The more properties you inspect, the better the comparisons and the better your perspective.

From auctions to regular sales, inspect inspect inspect! Look at it this way - do you buy the first pair of shoes you lay eyes on at the shops when it’s shoe-shopping day? No. You window shop until you actually like the look and shape of the heel, the front, the texture, try a few on, before bingo! The right shoe fits. Maybe a poor comparison to an investment worth hundreds of thousands of dollars, but the theory could easily apply.

The right house or apartment will almost speak to you. There is such thing as the right look and feel. Some call it feng shui, others call it awesome construction or designer potential. Whatever it is, you’ll know it when you see it. As long as you remain realistic about what you can afford and the most convenient location to schools and work.

I only inspect houses ‘for sale’

There you go again. Limiting your property buying selection. What about auctions? We know it seems like an archaic way to sell a house, like a game - but it’s still happening, and we can’t avoid it.

What’s more, there are bargains to be had! There’s a good percentage of people who steer right away from auctions for fear of the price getting too high, feeling too shy to bid or bidding emotionally instead of logically.

Auctions can feel a little confronting if you’re new to them. There's certainly a sense of hype and over excitement during an auction which sometimes deter people from going. Not everyone wants to make crucial decisions in a loud and lively environment.

The tips to take with you when going to auctions, is:

  • Inspect many: See a quite a few. Go to as many as you can so you can get a good idea how it all works.
  • Set a budget: There’s no point in bidding beyond your borrowing capabilities, so don’t do it. In most cases, you will have to produce a statement from your lender that authorises you purchase a property at the amount you win the bid for.
  • Silent bidder: Don’t like the idea of bidding or auctions themselves but are completely in love with the place and have to have it, then ask a friend, family member or hire a professional to do it for you. Just set your limit and away they go!
  • No cooling off: Yep. You read that correctly. There’s no cooling off period after your final bid wins the auction. So make sure you arrange: a pest inspection building inspection and for your solicitor to review the contract.

Remember - you’ll need to account for the deposit yourself. Make sure you have your cheque book or EFTPOS card handy! Also, if you are paying by card, check if there’s a surcharge. You’re already bound by a giant home loan, do you really want to add to your debt?

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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