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Home Loans

If you’re worried about making repayments on your home loan, the most important thing to do is to talk to your bank. Your bank is there to help you.

Contact your bank

Your bank is there to help you. They have a deadicated team to talk through your options.
Find your bank’s hardship assistance team

Reach out for support

Don’t be afraid to reach out and ask for help. There are services that offer free financial advice, legal advice and mental health support
See our list of support services

If you’re worried about how you will manage when your fixed rate ends, you’re not alone. Your bank is ready to listen and talk about your options.

Be open and realistic when talking about your financial situation.

Contact your bank as soon as you can. The sooner you do, the sooner they can find a solution that’s right for you.

It’s a good idea to discuss your options with your bank at least 3 months before your fixed rate ends.

Ask your bank what your variable rate will be. Depending on your situation, you may be able to get a reduced rate, or switch to a more suitable offer at another bank. If you’re thinking about switching, make sure you know all the costs involved – including the interest rate and any fees.

Don’t be afraid to talk to your bank about your situation, even if you plan to switch.

Smart tip

Smart Tip

If you’re paying your home loan on time but are having trouble paying other bills – such as your insurance, rates, body corporate or utility bills – talk to your bank. The bank may be able to give you breathing space to pay your other bills on time.

If you’re not eligible to switch banks or get a better interest rate at your bank, ask your bank about other options to reduce your repayments. They may be able to offer one of the following options, depending on your circumstances:

Use funds in your loan redraw or savings

If you have additional funds saved in your loan redraw or a ‘rainy day’ account, you may be able to use them to lower your home loan repayments. Ask the bank what your lower monthly repayment would be if you use these funds to reduce the outstanding balance of your loan.

Defer or reduce your monthly repayments

Your bank may be able to defer or reduce your monthly repayments for a short amount of time – usually a few months. Interest will continue to accrue even with a deferred payment. The length of your deferral may be determined by the amount of extra funds you have in your loan.

Switch to an interest-only loan

You may be eligible to switch your loan to interest only for a period of time. This means that you only pay the interest component of your repayments during the approved term. Interest rates for loans with interest-only repayments are higher. You will also pay more interest over the life of the loan.

Your bank may ask for information to better understand how they can help you. This may include:

  • Proof of income – such as recent pay slips, a profit and loss statement for self-employed individuals, rental income, Centrelink income, notice of termination or termination payments.
  • Expenses – such as rent or home loan payments, summary of outstanding bills, credit card statements, loan repayments from other financial providers and essential living expenses.

Your bank can ask for this information within 21 days of you contacting them. You must provide the information within 21 days of the bank asking. Your bank must tell you in writing if they decline your request.

Consider your income, expenses, debts, and any savings and investments. Think about where you could:

  • cut back on spending
  • reduce your expenses
  • consolidate any debts.

To help you budget, try the Moneysmart budget planner.

Your bank may ask about your income, expenses and any changes you intend to make when discussing options to help you.

If you’re also having trouble paying off your credit cards and other loans, tell your bank.

A financial counsellor may be able to help you. Their services are free.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not satisfied, you can then take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

If you’re struggling with money, you’re not alone.

Your bank has a dedicated financial assistance team ready to listen and talk about your options.

Be open and realistic when talking about your financial situation. Under the Banking Code of Practice, your bank must consider how they can help you with your financial difficulties.

Contact your bank as soon as you can. The sooner you do, the sooner they can find a solution that’s right for you.

Smart tip

Smart Tip

If you’re paying your home loan on time but are having trouble paying other bills – such as your insurance, rates, body corporate or utility bills – talk to your bank. The bank may be able to give you breathing space to pay your other bills on time.

Start by doing a budget. This can help keep your finances on track.

Consider your income, expenses, debts, and any savings and investments. Think about where you could:

  • cut back on spending
  • reduce your expenses
  • consolidate any debts.

To help you budget, try the Moneysmart budget planner.

Your bank may ask about your income, expenses and any changes you intend to make when discussing options to help you.

Depending on your personal situation, your bank may have a range of options available. This may include:

Use funds in your loan redraw or savings

If you have additional funds saved in your loan redraw or a ‘rainy day’ account, you may be able to use them to lower your home loan repayments. Ask the bank what your lower monthly repayment would be if you use these funds to reduce the outstanding balance of your loan.

Defer or reduce your monthly repayments

Your bank may be able to defer or reduce your monthly repayments for a short amount of time – usually a few months. Interest will continue to accrue even with a deferred payment. The length of your deferral may be determined by the amount of extra funds you have in your loan.

Consolidate your loans and other debts

If you have multiple loans or debts, you may be able to consolidate the balance into one loan. You can then pay off the balance with regular instalments.

Restructure your loan

Your bank may be able to restructure your mortgage by changing the terms of your loan. They may increase the loan term to reduce your monthly repayment. However, this means you will pay more interest over the life of the loan. Ask your bank if they can reduce your interest rate or waive any fees.

Switch to an interest-only loan

You may be eligible to switch your loan to interest only for a period of time. This means that you only pay the interest component of your repayments during the approved term. However, interest rates for loans with interest-only repayments are higher. You will also pay more interest over the life of the loan.

Your bank may ask for information to better understand how they can help you. This may include:

  • Proof of income – such as recent pay slips, a profit and loss statement for self-employed individuals, rental income, Centrelink income, notice of termination or termination payments.
  • Expenses – such as rent or home loan payments, summary of outstanding bills, credit card statements, loan repayments from other financial providers and essential living expenses.

Your bank can ask for this information within 21 days of you contacting them. You must provide the information within 21 days of the bank asking. Your bank must tell you in writing if they decline your request.

Smart tip

Smart Tip

If you’ve fallen behind on your home loan repayments because of accident or illness, income protection insurance may help you make repayments. Call your super fund or insurer to check if you have this.

If you’re also having trouble paying off your credit cards and other loans, tell your bank.

A financial counsellor may be able to help you. Their services are free.

Your credit score is based on personal and financial information about you that’s kept in your credit report.

Missing or making a late repayment usually lowers your credit score. A lower credit score may affect your ability to get finance. Your credit score may get worse with each payment that you miss without speaking to your bank.

If you cannot make your loan or credit card repayments on time, it’s important to contact your bank. Depending on your circumstances, you and your bank may agree to a financial hardship arrangement. A benefit of a financial hardship arrangement is that your credit report shows that you made repayments on time. This is for the period of the arrangement – as long as you meet any terms agreed with the bank, such as making lower repayments.

Your credit report includes information that shows you’re in a financial hardship arrangement. This stays on your credit report for one year, then disappears. It doesn’t include the reason or the details of the arrangement. It doesn’t impact your credit score. Credit reporting bodies cannot use financial hardship information to calculate your credit score.

Avoid companies offering to repair your credit score for a fee. You can get one free copy of your credit report every 3 months from each of the credit reporting bodies. These are Equifax, Experian and illion.

The Moneysmart website explains how credit reporting works and how to get yours for free.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re then not satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

If you’re struggling with money, you’re not alone.

Your bank has a dedicated financial assistance team ready to listen and talk about your options.

Be open and realistic when talking about your financial situation. Under the Banking Code of Practice, your bank must consider how they can help you with your financial difficulties.

Contact your bank as soon as you can. The sooner you do, the sooner they can find a solution that’s right for you.

Start by doing a budget. This can help keep your finances on track.

Consider your income, expenses, debts, and any savings and investments. Think about where you could:

  • cut back on spending
  • reduce your expenses
  • consolidate any debts.

To help you budget, try the Moneysmart budget planner.

Your bank may ask about your income, expenses and any changes you intend to make when discussing options to help you.

Depending on your personal situation, your bank may have a range of options available. This may include:

Use funds in your loan redraw or savings

If you have additional funds saved in your loan redraw or a ‘rainy day’ account, you may be able to use them to lower your home loan repayments. Ask the bank what your lower monthly repayment would be if you use these funds to reduce the outstanding balance of your loan.

Defer or reduce your monthly repayments

Your bank may be able to defer or reduce your monthly repayments for a short amount of time – usually a few months. Interest will continue to accrue even with a deferred payment. The length of your deferral may be determined by the amount of extra funds you have in your loan.

Consolidate your loans and other debts

If you have multiple loans or debts, you may be able to consolidate the balance into one loan. You can then pay off the balance with regular instalments.

Restructure your loan

Your bank may be able to restructure your mortgage by changing the terms of your loan. They may increase the loan term to reduce your monthly repayment. However, this means you will pay more interest over the life of the loan. Ask your bank if they can reduce your interest rate or waive any fees.

Switch to an interest-only loan

You may be eligible to switch your loan to interest only for a period of time. This means that you only pay the interest component of your repayments during the approved term. However, interest rates for loans with interest-only repayments are higher. You will also pay more interest over the life of the loan.

Your bank may ask for information to better understand how they can help you. This may include:

  • Proof of income – such as recent pay slips, a profit and loss statement for self-employed individuals, rental income, Centrelink income, notice of termination or termination payments.
  • Expenses – such as rent or home loan payments, summary of outstanding bills, credit card statements, loan repayments from other financial providers and essential living expenses.

Your bank can ask for this information within 21 days of you contacting them. You must provide the information within 21 days of the bank asking. Your bank must tell you in writing if they decline your request.

Sell and downsize to a home you can afford

Sometimes it may be in your best interests to sell your property. Especially if you cannot make repayments and are losing equity in your property. If you decide to sell, it’s reasonable to ask your bank for sufficient time.

Smart tip

Smart Tip

If you’ve fallen behind on your home loan repayments because of accident or illness, income protection insurance may help you make repayments. Call your super fund or insurer to check if you have this.

If you’re struggling financially because your situation has changed, your bank may agree to restructure your loan arrangement.

If you and your bank agree on a new loan arrangement, your bank tells you about the new arrangement in writing. This includes:

  • the repayments you need to make
  • what happens at the end of the arrangement
  • whether the new arrangement impacts your banking services or credit report.

It’s important to understand that making changes to your loan may increase interest charges. If you cannot make repayments at the end of your arrangement, you may have to sell your property. Your property may be worth less compared to selling earlier. This means you may lose money.

If your loan is subject to a guarantee, your bank will notify your guarantor about your declining financial position. The bank will give them:

  • A copy of any formal demand or default notice given to you by the bank.
  • A written notice if you told the bank about financial difficulty that resulted in a change to your loan.
  • A written notice if you defaulted for more than 2 months after you got the default notice referred to above.

If you default, you may have to sell assets or property to pay back the loan. If the sale price does not pay back the full loan amount, the bank may enforce the guarantee. This means they can recover the difference from the guarantor.

You should seek legal advice about a formal demand or notice for payment to a guarantor. Guarantors can also contact the bank if they’re experiencing financial difficulty.

If you’re also having trouble paying off your credit cards and other loans, tell your bank.

A financial counsellor may be able to help you. Their services are free.

Smart tip

Smart Tip

Stay away from companies offering to ‘save’ your home or negotiate reduced repayments. These companies charge high upfront and ongoing fees and could leave you worse off.

Call the National Debt Helpline on 1800 007 007 to talk to a free, independent and confidential financial counsellor instead.

Your credit score is based on personal and financial information about you that’s kept in your credit report.

Your credit report shows whether you’ve made your loan or credit card repayments on time over the past 2 years.

Missing or making a late repayment usually lowers your credit score. A lower credit score may affect your ability to get finance. Your credit score may get worse with each payment that you miss without speaking to your bank.

If you cannot make your loan or credit card repayments on time, it’s important to contact your bank. Depending on your circumstances, you and your bank may agree to a financial hardship arrangement. A benefit of a financial hardship arrangement is that your credit report shows that you made repayments on time. This is for the period of the arrangement – as long as you meet any terms agreed with the bank, such as making lower repayments.

Your credit report includes information that shows you’re in a financial hardship arrangement. This stays on your credit report for one year, then disappears. It doesn’t include the reason or the details of the arrangement. It doesn’t impact your credit score. Credit reporting bodies cannot use financial hardship information to calculate your credit score.

Avoid companies offering to repair your credit score for a fee. You can get one free copy of your credit report every 3 months from each of the credit reporting bodies. These are Equifax, Experian and illion.

The Moneysmart website explains how credit reporting works and how to get yours for free.

 

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not then satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

If you’re struggling with money, you’re not alone. Your bank is ready to listen and talk about your options.

Be open and realistic when talking about your financial situation.

A default notice is a letter from your bank warning you that your account is in default because you’re behind with your repayments.

If you get a default notice, read it carefully. It will outline steps you can take, timing, and other information that might affect your financial position.

When you get a default notice, you have a limited period of time to ask your bank for help and come to an arrangement. If you don’t come to an arrangement, your bank may start legal action.

It’s essential to stay in touch with your bank. Your bank always looks for ways to help you stay in your home or find another solution.

If they cannot do that, and you cannot meet the conditions of a default notice, your bank may lodge a legal document called a Statement of Claim.

A Statement of Claim is an application made to the court that sets out how much your bank claims you owe them and why they’re making the claim.

If you receive a Statement of Claim, seek legal advice as soon as possible – within 4 weeks at the latest. If you do nothing, the court may enter a judgment against you, and you may lose the opportunity to lodge a defence, if you have one. The bank might move to sell your home.

Legal costs relating to the Statement of Claim are added to your loan balance. The sooner you contact your bank, the better. This helps to keep down the legal costs added to your loan.

You can still talk to your bank and try to come to an arrangement about your loan even after receiving a Statement of Claim.

If you need help, there are services that offer free financial advice, legal advice and mental health support. See our list of support services.

Sometimes it may be in your best interests to sell your property. Especially if you cannot make repayments and are losing equity in your property.

If you decide to sell, it’s reasonable to ask your bank for sufficient time. A local real estate agent can provide an estimate of how much time this is.

Delaying decisions about selling may increase your costs. Your property may be worth less than selling earlier, which may result in a larger financial loss.

Your bank may determine that selling the property is the only remaining option. In this case, the bank can apply to the court for an order to sell it.

A ‘shortfall debt’ is money still owed on your loan after your property is sold.

If you still owe money to the bank, body corporate, or Council for unpaid rates, they can take legal action to recover the outstanding balance. This can include making a claim to sell your other assets.

Seek legal advice and talk to your bank for help and support about how to repay the outstanding balance.

In some circumstances, the bank may sell the shortfall debt to a debt collector. Debt collectors must consider any financial hardship requests you make when paying off this debt.

If you only had a small deposit when you bought the property, your bank may have taken out an insurance that protects the bank in case of a shortfall debt. This is called Lenders Mortgage Insurance (LMI).

If the insurance company pays the shortfall debt, you may owe them the money to repay the shortfall debt. The insurance company works with you to help and support you to pay off the debt.

Smart tip

Smart Tip

Check your LMI. It may cover periods of unemployment or a long-term change in your circumstances due to illness or injury.

If your loan is subject to a guarantee, your bank will notify your guarantor about your declining financial position. The bank will give them:

  • A copy of any formal demand or default notice given to you by the bank.
  • A written notice if you told the bank about financial difficulty that resulted in a change to your loan.
  • A written notice if you defaulted for more than 2 months after you got the default notice referred to above.

If you default, you may have to sell assets or property to pay back the loan. If the sale price does not pay back the full loan amount, the bank may enforce the guarantee. This means they can recover the difference from the guarantor.

You should seek legal advice about a formal demand or notice for payment to a guarantor. Guarantors can also contact the bank if they’re experiencing financial difficulty.

Help is available if you cannot afford a lawyer.

Legal Aid provides free legal advice and services to disadvantaged people and legal representation for eligible clients.

Community Legal Centres provide free and accessible legal services – especially to people experiencing financial hardship, discrimination, or domestic or family violence.

The law society in your state or territory can give you names of lawyers who may be able to help with your case. The lawyer will explain how much their services are likely to cost. They may take your case ‘pro bono’, which means you don’t have to pay their fees.

To contact Legal Aid, a Community Legal Centre near you, or the law society in your state, see legal support.

Defaulting on your loan negatively impacts your credit score.

The more overdue your payment, the greater the impact. If your bank takes legal action against you, this can further impact your credit score. A poor credit score can affect your ability to get finance, get a phone contract or sign up to a new energy provider.

Your bank will tell you if they make a report about a default to a credit reporting body.

Avoid companies offering to repair your credit score for a fee. The Moneysmart website explains how credit reporting and credit scores work, what you can fix and how to do it for free.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not then satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

If you are back on track, it’s essential to look at what else has changed, especially if you’ve had to sell your home.

Your bank is ready to listen and help you move forward.

The sooner you contact your bank, the sooner you can start.

Suffering a financial loss can shake your confidence and leave you feeling helpless.

A good place to start to get back on track is to call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor. Financial counsellors are qualified professionals. They provide free, independent and confidential information and advice. They can help you better understand and manage your finances.

You can also contact Beyond Blue on 1800 512 348. They offer a wellbeing and mental health support service.

Getting through each day may seem a challenge after a financial loss. But as your finances start to improve, things will get better.

Start by working out where you are right now, and then think about where you want to be in the future.

Consider your income, your expenses, your debts and what savings you have to support you.

Smart tip

Smart Tip

Keep a diary of everything you spend over a week, then a month. You’ll quickly see how things add up and where you may be able to save. To help you, try the Moneysmart budget planner.

Consider your income, expenses, debts, and any savings and investments. Think about where you could:

  • cut back on spending
  • reduce your expenses
  • consolidate any debts.

To help you budget, try the Moneysmart budget planner.

Your bank may ask about your income, expenses and any changes you intend to make when discussing options to help you.

While you want to get your finances back on track as soon as possible, you need to be patient with financial realities, especially if you’ve lost your home.

Even if you want to buy a new home as soon as possible, you still need to improve your credit score and build a deposit.

If your expectations are unrealistic, you may get discouraged. Instead, set a realistic timeframe and work towards that as a goal.

As you start to get your finances back on track, try to build a savings buffer.

Put aside a small amount from your income each week to start building a safety net. This helps deal with unexpected costs or financial shocks. It may also help you avoid credit options that could put you further in debt, for example payday loans.

Even putting aside a small amount can make a difference. The important thing is to do it regularly.

Learning more about how to manage your finances helps you recover and make more informed decisions in the future.

There are plenty of online resources about personal finances and managing debt. Call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor about where to start.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not then satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

About the ABA

The ABA’s mission is to support our member banks to build a strong, stable and trusted banking system, to grow the Australian economy and build the financial well-being of all Australians.

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