Feb 22, 2021 5:11:18 PM

What Can You Do When Your Mortgage Deferral Ends

Topics: Selling, Mortgage Broker, Home Loans 0

In the last year, a year that none of us could have predicted, with lockdowns and closures of many different industries, affected mortgage-holders were able to put up their hands and ask for the assistance offered by most of the Australian Banks and Lending institutions. It was help that was very needed and very timely.

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Now things are changing, we are seeing the winding back of some Government support measures and the Banks and Lenders are reassessing the remaining clients still needing assistance in order to change the nature of their ongoing support.

However, the Australian bankers Association reports that the latest data from the four majors shows positive news, that 91% of deferred loans have resumed repayments. Of the four majors, only 0.5% of all their loan facilities are currently deferred.

While this is an encouraging sign of recovery, it’s clear that there are still Australians who need assistance to get through this and back on their feet. If this is you, support is still available and here are some options of what to do next.

Options as bank support for the mortgage deferral winds up

1. Begin making repayments again
If you can afford to do so, starting your repayments again will help reduce the amount of interest you’re being charged on your loan. Even if it is not the full repayment, any payment will absolutely help.

2. Extend your loan term to reduce your repayments
By extending your home loan, for example from 25 to 30 years, your monthly or fortnightly repayments will decrease as your loan is spread out over a longer term. Conversely, the amount of interest you’re charged will increase as your loan term is extended, but this may give you the required breathing space you need.

3. Extend your repayment holiday
You may be eligible for an extension of your mortgage deferral period if your income has reduced significantly due to your COVID-19 work arrangements. Talk to your mortgage broker or lender to find out if you qualify, there may be other options available to you.

4. Refinance to a new interest rate, fixed rate, variable rate or even interest only
With interest rates at record lows, this may be a good time to refinance to take advantage of lower interest rates. Fixing part or all of your home loan could provide some security in knowing how much you have to pay on your mortgage. You could investigate this with your broker or lender; you may even be able to do this with your existing lender, as refinancing to a new lender after a mortgage deferral may be more challenging.

5. Sell your property
This may be a last resort and a tough decision to have to make. But, if you’re facing longer term significant financial stress, this may be an option that allows you to stop the worrying and start your new normal.

Seek help early

Talk to your mortgage broker or lender as soon as you feel you need some expert advice and options. Your lenders are eager to help and your mortgage broker can start the conversations happening and work on your action plans for the future.


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.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.