If you’re finding it tough to manage your mortgage repayments, you’re not alone. The rising cost of living, unexpected expenses and changes to income have left many Australians feeling similar financial pressure. But the good news is that help is available, and taking steps early on can make all the difference. Here’s a look at the options that may be available to you, if you’re experiencing financial hardship or are at risk of mortgage stress.
Understanding financial hardship assistance
Australians are being encouraged to reach out to their bank or lender for financial hardship assistance, following new research from ASIC’s Moneysmart highlighting the financial challenges many are facing.
Research findings show that nearly half of Australian adults with debt (47%) have struggled to meet repayments in the past year, due to cost-of-living pressures, reduced income and unexpected expenses.
Despite this, many are unaware that they can seek financial hardship assistance from their banks or lenders, support that includes adjusting their loan terms, pausing or reducing repayments, providing much-needed breathing space to get back on track.
ASIC Commissioner Alan Kirkland said, “Customers in hardship are entitled under the law to request assistance.”
“The message for Australians experiencing financial stress is that banks or lenders have a responsibility to support customers. If you are worried about being able to make your repayments, you’re entitled to ask your bank or lender for help.”
Overcoming barriers to getting help
While financial hardship assistance is available, several barriers prevent people from reaching out. These include a lack of awareness, anxiety about the process, and concerns about how it might affect their credit score.
Aiming to remove these barriers and encourage Australians who are struggling financially to reach out for assistance, Moneysmart is launching a new awareness campaign, Just Ask!
Along with answers to common questions you may have about applying for financial hardship assistance, the campaign includes guidance around how to ask a lender for help.
It’s important to remember that lenders have dedicated hardship teams ready to help, and getting assistance early on helps prevent more significant issues further down the road.
Steps to take if you’re struggling financially
- Contact your lender. If you're struggling to meet your mortgage repayments, the first step is to talk to your lender. They can discuss options like changing your loan terms or adjusting your repayment plan.
- Create a budget. Review your finances to see where you can cut back or manage your expenses differently, as that might help free up money to stay on top of your repayments.
- Explore additional support. Contact your utility providers about payment plans or shop around for better deals. You can also reach out to a finance consultant for personalised advice.
- Consider insurance. If you've fallen behind on your mortgage because of an accident or illness, check if you have income protection insurance that can cover your repayments.
- Make a plan. If your financial situation is unlikely to improve, you may need to consider selling your home. This is a big decision, so get advice from a finance consultant or legal expert before taking this step.
Taking care of yourself
Financial stress can take a toll on your mental health. If you're feeling overwhelmed, reach out for help. Support is available through organisations like Beyond Blue, which offers 24/7 assistance. Contact a finance consultant at Mortgage Express to discuss your finance options and get the guidance you need to navigate these challenging times.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
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