10 home loan questions your bank won't answer
The questions our clients ask most — answered honestly, the way a bank never will. Written by a Sydney mortgage broker (we also speak Mandarin, Cantonese and Vietnamese).
1. Why doesn't my bank ever offer to lower my interest rate?
Because it doesn't have to. Existing customers rarely ask, so banks quietly leave them on higher "loyalty tax" rates while advertising sharper deals to new customers. Your rate almost never drops unless you or your broker ask for a repricing or refinance — which is why a yearly review often saves thousands.
2. Why does my friend have a lower interest rate than me?
The same bank can still mean very different deals. Your rate depends on your loan-to-value ratio (LVR), loan size, whether you're owner-occupier or investor, new-versus-existing customer, and how hard the rate was negotiated. Two similar borrowers can sit 0.5% or more apart simply because one asked and the other didn't.
3. We earn the same — why can someone else borrow $200,000 more?
Borrowing power is income minus commitments, run through each lender's own assessment formula. Credit-card limits, HECS debt, car loans, dependants and even which lender you choose can move your maximum by six figures — so trimming limits and picking the right lender often unlocks more than a pay rise would.
4. Is refinancing worth it? Don't just look at the cashback.
Cashback is a hook. The real question is your net saving after break costs, LMI and fees across the years you'll keep the loan. A $2,000 cashback means nothing if a slightly higher rate quietly costs you $5,000 — so compare the true long-run cost, not the headline offer.
5. Can I get a home loan while on maternity leave?
Yes, often. Many lenders accept a return-to-work letter confirming your role, return date and income, and some will assess your normal pre-leave salary rather than reduced leave pay. The key is choosing a lender with parental-leave-friendly policy, because the wrong one will only count your lower current income.
6. Do I really need pre-approval?
In most cases, yes. Pre-approval shows your real budget, tells agents you're serious, and surfaces problems before you fall for a property. Just remember it's conditional rather than a guarantee, and typically lasts around 90 days.
7. Can I change jobs before buying a home?
It's risky right before or during an application. Lenders prefer stable, ongoing employment, and switching can pause or sink approval. If the new role is in the same field, past probation, or a clear step up it's often fine — but talk to a broker before you resign.
8. Some banks advertise low rates — are they really the best?
Not always. A headline rate can hide high fees, a poor comparison rate, no offset account, slow turnaround, or strict policies that reject your scenario. The cheapest rate is only the best deal if you actually qualify and the features suit how you'll use the loan.
9. Why do banks ask for so much paperwork?
Responsible-lending rules require lenders to verify — not assume — that you can repay, so income, expenses, debts and ID all need evidence. Clean statements, payslips and tax returns speed the process up, and a broker tells you exactly what each lender wants so you only gather it once.
10. How often should I review my home loan?
At least once a year. Rates move, your equity grows, and lenders keep their sharpest offers for new customers — so loyalty quietly costs you. An annual review — repricing with your current bank or refinancing to a better one — is the simplest way to stop overpaying.
forumGot a question about your own situation?
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This article is general information only and does not take into account your personal circumstances. Speak with a licensed mortgage broker for advice specific to you.