Why you should look beyond mortgage rates

24 Nov 2025

Why you should look beyond mortgage rates

When comparing mortgages, it can be easy to focus on one thing: mortgage rates. After all, they directly affect what you pay each month. But there’s more to your mortgage than this number. And locking in the lowest rate isn’t always the best strategy. Whether you’re applying for a home loan or refinancing, here are some key things to keep on your radar.

Your mortgage structure

The way your mortgage is set up can have a big impact on flexibility, costs and how well it fits your goals.

Here are the three main options:

Fixed-rate mortgage: Fixing your mortgage can offer stability. Your repayments stay the same for a set period, helping with budgeting – but you’ll likely face limits on how much extra you can repay without triggering break fees.
Floating-rate mortgage: A floating (variable) rate gives you more flexibility. You can usually make unlimited extra repayments, but the interest rate may be higher than fixed-term rates, and it often fluctuates as interest rates change, based on the Official Cash Rate (OCR).
Split-rate mortgage: Looking for balance? A split loan lets you divide your mortgage into portions – some fixed, some floating. This can provide you with the stability of fixed rates and the flexibility to make extra repayments on the floating portion. Plus, staggering the fixed terms can help manage the impact of rising (or falling) rates over time.

So, think about your plans for the future and talk to your Financial Adviser to discuss the best possible options for you and your family. Life can change, and choosing a mortgage structure that supports that (not just your day-to-day budget) is key.

The break costs

Fixed-term mortgage rates often come with break fees (also known as ‘early repayment fees’) if you make changes before the term ends – like paying extra over a certain threshold, refinancing or selling your home and repaying the mortgage in full.

Even if you’re not planning a change, life happens. Your Mortgage Link adviser can help you understand when break fees might apply, so you’re not caught off guard.

Long-term affordability

Mortgage rates can go up as well as down. Can your mortgage still fit your budget if rates rise? Make sure you don’t just base your decision on today’s number, but think ahead too. Your Mortgage Link adviser is here to stress-test different scenarios, so you know where your limits are.

Overall interest costs

As we said, it’s easy to focus on how much you pay now, but the bigger picture is how much interest you’ll pay over the life of your loan.

Take a $500,000 mortgage at 5.5% over 30 years. If you make no extra repayments, you’ll pay around $521,000* in interest alone – bringing the total cost (principal + interest) to over $1 million.

All else being equal, paying just $100 extra per week could reduce your interest to around $360,000, saving you over $160,000 and shaving years off your mortgage. That’s money you could use for other goals, like your retirement nest egg. Of course, don’t forget to check you’re not incurring a break fee if you’re on a fixed rate.

Helpful mortgage features

When you look beyond mortgage rates, you may find some loans come with interesting built-in features.

Offset accounts

A transaction account linked to your mortgage. The balance of this account is ‘offset’ against your home loan, reducing the interest you’re charged. The more you keep in your offset, the less interest you pay – and the faster you can potentially repay your loan.

Offset accounts are typically available on floating-rate mortgages and may come with fees, so it’s worth checking whether the potential savings outweigh the cost.

Redraw facilities

If you’ve made extra repayments, a redraw facility lets you access those funds if needed. It’s a useful safety net – reducing interest when left untouched, and giving you access to cash when needed.

Not all loans include this feature, and lenders may have conditions, so it’s worth checking your options.

Portability options

Home loan portability allows you to transfer your existing mortgage to a new property when you move, without closing the loan or applying for a new one. This can save you the time, hassle and costs of refinancing. And if you’re on a fixed rate, it may help you avoid break costs, as long as you’re not changing the loan amount or structure. You also need to stay with the same lender, and eligibility criteria apply.

A Mortgage Link adviser can help you check if your lender offers this option and if you’re eligible.

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