What are my mortgage options?

If your personal or business income has been impacted the banks are offering options to provide mortgage relief.  The earlier you seek help, the more options you will have.

All lenders have options known as hardship variations.  These may include changing the terms of your loan or temporarily pausing or reducing your repayments.  The option most publicised at the moment is the opportunity to apply to pause or defer your mortgage repayments.  While this may be an immediate and effective way to obtain short term cashflow relief, it is important to understand that interest will accumulate as normal during the repayment holiday period.

This means that interest will be capitalised and added to your loan balance, as will any fees or charges.

Some banks will recalculate your loan balance at the end of the support period and extend your loan term so that your payments remain the same.  Other lenders will increase your repayments for the remainder of your loan term.

Other options

There may be other measures available such as extending interest only periods, waiving fees associated with arrears or the breaking of fixed rate structures, and emergency credit card limit increases.

Relief for other loan products

Relief measures can also be potentially applied to motor vehicle and personal loans, and credit card debt.

Will a repayment holiday affect my credit rating?

Pausing or deferring your mortgage or loan will not show on your credit report or impact your credit rating.

Options for businesses

Small and medium businesses who are experiencing financial difficulty also have the option to defer their loan repayments for six months. This applies to all small and medium business loan, overdraft, home loan, car loan and credit card products.

Which option should I take?

If you need help understanding the options and the implications, please get in touch with your financial adviser of mortgage broker.  The team at Infocus Lending Advisory are available to help with any questions you have, regardless of whether you have lending products with us or not.

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