Are you one of more than 800,000 Australians who have opted to defer repaying your home loan due to the COVID-19 pandemic?
The deadline to resume mortgage payments is fast approaching.
Your lender may have contacted you to ask if you are able to recommence paying your loan at the end of the six-month deferral period. If you advised your bank that you will have difficulty doing so because you are still dealing with financial hardship, the good news is there is a four-month extension available.
Research by financial comparison website Mozo found of those who had taken out a mortgage holiday, 43 per cent didn’t think they would be able to service their loan when the holiday period ended, and 53 per cent were worried they might be forced to sell their homes within six months.
Much of this anxiety stems from the uncertainty over the future of the federal government’s JobKeeper scheme, which is scheduled to conclude at the end of September.
Bankers have also reported there are large numbers of borrowers who appear to be in reasonable financial shape and could start repaying their home loans – either in part, or in full – but are of the view that they’d like to continue to defer their loan repayments.
As a result, banks are devoting considerable resources in an attempt to persuade these customers that it is in their financial interest to resume loan repayments as soon as possible, because the unpaid interest is being added to their outstanding loans.
If you have asked your lender to defer your home loan repayments, it is important to be open and transparent with them when it comes to what happens at the end of the repayment holiday. We recommend that you work out a plan to manage the situation.
If you are comfortable with resuming your loan repayments, make sure you are doing so at the most competitive interest rate, ideally with a ‘2’ in front.
If you are not feeling confident about these negotiations, we encourage you to seek assistance from an experienced mortgage broker.
Our friendly team are always here to support you and can be contacted on 1300 707 766.