By: NZ Mobile Mortgages Team
Let’s be honest — getting a mortgage in New Zealand can feel like stepping into a maze. There are so many “rules” people talk about, advice flying in from every direction, and a lot of noise that makes it hard to tell fact from fiction.
So, if you’re feeling overwhelmed or second-guessing whether you really know how mortgages work — don’t worry. You’re not alone. Let’s bust some of the biggest mortgage myths we still believe in 2025 and clear up the confusion once and for all.
1. You need a 20% deposit to buy a home
This is probably the most common one we hear. While having a 20% deposit is ideal (it helps you avoid extra fees), it’s not a must-have — especially if you’re a first-home buyer.
In fact, many lenders can work with 10% or even 5% deposits. The Reserve Bank of New Zealand (RBNZ)[1] relaxed some rules in 2024, making low-deposit lending more accessible again.
2. You should just go with your everyday bank
It might feel safer to stick with the bank you already have a relationship with — but that doesn’t mean they’ll give you the best deal. Mortgage advisors (like us, at NZ Mobile Mortgages) can compare multiple banks and lenders to find something that better suits your needs. And the benefit? It could save you thousands over the full mortgage term.
3. The lowest interest rate is always the best
Sure, low rates sound great — but sometimes there’s a catch. Some loans with the lowest rates come with hidden fees or lack flexibility (like making extra repayments). The best mortgage is the one that fits your whole situation, not just your headline rate.
4. Pre-approval means you’re guaranteed the loan
We wish it were that simple. Pre-approval is a great first step, but it’s still conditional. The bank still needs to assess the property and make sure your financial situation hasn’t changed. So, it’s not a green light just yet — more like an orange one, but you are definitely moving in the right direction.
5. You can’t get a mortgage if you’re self-employed
Not true! It might take a few extra steps, like providing tax returns or business financials, but it’s totally possible. Lenders are just looking to understand your income flow and how stable it is.
6. Refinancing is too expensive and not worth the hassle
We hear this a lot, but actually — refinancing can save you heaps. If rates have dropped or your circumstances have changed, it might be the perfect time to switch and tailor your repayments to meet your financial goals. Some banks even offer cashbacks to cover the costs, and some banks can refinance with zero legal costs!
7. Fixing your interest rate is always the best move
Fixed rates give you certainty, which is great — but they’re not for everyone. Floating or split loans offer flexibility, especially if you’re planning to make extra repayments or sell soon. In 2025, a lot of people are choosing shorter fixed terms or floating rates, hoping to benefit if rates drop.[1]
8. You can’t change anything until your fixed term ends
You can make changes, even during a fixed term — you just might need to pay a break fee. But sometimes, the long-term savings from switching or restructuring outweigh that cost. It’s all about doing the maths. Our mortgage advisors can give you the best solutions in such cases.
9. Renovations mean getting a separate loan
Nope — you can often top up your existing mortgage to fund renovations. It’s usually cheaper than taking out a personal loan, and it keeps everything under one roof. Handy, right?
10. If you’ve got bad credit, it’s game over
Having a few credit blips in the past doesn’t mean you can’t ever own a home. There are specialist lenders who deal with exactly this kind of situation. Yes, interest rates might be a bit higher, but it’s still possible to get on the property ladder.
So there you have it — 10 mortgage myths, busted!!! Whether you’re buying your first home, looking to refinance, or just exploring your options, knowledge is power.
Still unsure what’s true and good for your situation? Chat with a mortgage advisor at NZ Mobile Mortgages. We can break things down in plain English and help you make a confident decision.