Common Mortgage Application Mistakes in 2025 & How to Avoid Them

Applying for a mortgage is one of the biggest financial commitments you’ll ever make. Unfortunately, many applicants make mistakes that delay approval or lead to higher interest rates. Here’s what to avoid in 2025.

🚨 1. Not Checking Your Credit Score Before Applying

🔴 Why it’s a mistake: Lenders check your credit history, and a low score can mean higher interest rates or rejection.
✔ How to avoid it: Check your credit report before applying and take steps to improve it.

🚨 2. Not Saving Enough for a Deposit

🔴 Why it’s a mistake: Most lenders require at least 5-10%, but a 20% deposit gets better rates.
✔ How to avoid it: Use Lifetime ISAs (LISA) or government schemes to boost savings.

🚨 3. Changing Jobs Right Before Applying

🔴 Why it’s a mistake: Lenders prefer at least 6 months of stable employment before approving a mortgage.
✔ How to avoid it: If possible, stay in your current job until after mortgage approval.

🚨 4. Applying for Other Loans or Credit Before a Mortgage

🔴 Why it’s a mistake: Car loans, credit cards, and personal loans increase your debt-to-income ratio, making you a riskier borrower.
✔ How to avoid it: Avoid taking on new debt for at least 6 months before applying.

🚨 5. Underestimating Additional Costs

🔴 Why it’s a mistake: Many buyers focus only on their mortgage payment, forgetting about stamp duty, legal fees, surveys, and home insurance.
✔ How to avoid it: Budget for all home-buying costs before committing to a mortgage.

🚨 6. Not Using a Mortgage Broker

🔴 Why it’s a mistake: Banks only offer their own mortgage products, but brokers compare hundreds of lenders to find the best deal.
✔ How to avoid it: Speak to a whole-of-market mortgage broker to get expert advice.

💡 Tip: AVOID applying for multiple mortgages at once – this signals to lenders that you may be financially unstable.