Navigating Mortgage Markets in 2025: How to Secure Better Deals

With lenders implementing stricter regulatory measures in today's high-interest rate environment, Pha Financial Services has provided insights on how borrowers can secure more favourable mortgage terms.

Despite economic challenges, many Australians remain committed to homeownership. However, finding optimal mortgage arrangements requires strategic planning. Here are key approaches for obtaining better mortgage deals in 2025:

Credit History Matters More Than Ever

The expanded Comprehensive Credit Reporting (CCR) compliance in 2025 makes maintaining pristine repayment habits essential. Even minor defaults now have significant consequences, as lenders scrutinize repayment behaviour, credit inquiries, and outstanding debts over a two-year period.

Phil advises borrowers to:

• Clean up existing credit files

• Minimize unnecessary credit inquiries

• Consider debt consolidation to improve overall credit standing

Strategic Rate Selection

As interest rates continue to fluctuate in 2025, borrowers must carefully evaluate whether fixed or variable-rate loans best align with their financial circumstances. Monitoring market trends and consulting with mortgage brokers can significantly impact loan terms. Understanding the advantages and limitations of each option is particularly important as higher rates continue affecting affordability assessments.

Stability is Key

Economic uncertainty has elevated the importance of consistent income and prudent financial management. Lenders in 2025 increasingly favour applicants who demonstrate employment stability and minimal financial obligations. Maintaining the same job and residence for at least 12 months substantially improves prospects for favourable loan terms.

Strategic Pre-Approval

While mortgage pre-approval can expedite the home-buying process, applying with multiple lenders simultaneously can damage credit scores. Working with an experienced broker helps identify optimal pre-approval opportunities, limiting credit inquiries and protecting borrower credit profiles.

Focus on Substantial Deposits

Borrowers should prioritize saving for deposits of at least 20 percent. This approach not only reduces the loan-to-value ratio (LVR) but also eliminates Lenders Mortgage Insurance (LMI) costs. Larger deposits demonstrate financial discipline and strengthen mortgage applications. In today's climate of rising rates and inflation, lenders exercise greater caution—a substantial deposit signals commitment and reduces perceived lending risk.

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.