Keeping your mortgage on track

Mortgage control

If you are making your mortgage repayments but finding your finances are pretty stretched, there are things you can do. Here we explain what action you can take to keep on top of your repayments. 

Look at your repayments

Use our mortgage calculator to look at your repayments and test different scenarios. What would they be if the interest rate goes up? Would you still be able to afford them?

Mortgage calculator

What if you or your partner lost your job? Could you make the mortgage repayments if that happened? Do you have a buffer of savings you could draw on?

Create a budget

Monitoring your spending can help you to keep up with your mortgage repayments. How do you do this? Make a budget, stick to it and adjust it as your financial situation changes. Use our budget planner to do this.

Budget planner

 See how to do a budget for tips on what to do and how to get help putting your budget together.

Goal setting

A budget will help you to set a goal you can work towards. Whether you are trying to pay off your mortgage faster, save for a big bill that is coming up or build up your savings for a rainy day, here are some goal-setting rules to follow:

  • Be specific - you're more likely to achieve your goal if you work out exactly what you want and why
  • Be realistic - don't make your budget so tight you won't be able to stick to it - look at cutting down on extras while still allowing an occasional treat
  • Stay motivated - set yourself a time frame to accomplish your goal and, if you need to, break your goal down into smaller chunks to make it easier to achieve

Video: Tran struggles with mortgage repayments

Mortgage help video

Tran struggles to pay his mortgage when interest rates rise. Then he finds a financial counsellor to help him with his money problems.  

Transcript: Tran struggles with mortgage repayments

Speak to your lender

Smart tip

Contact your lender as quickly as possible if you are struggling with your mortgage. The faster you contact them the more options you'll have.

If you are struggling with your repayments, talk with your lender about it. Your lender must assess and respond to your request within a set amount of time.

Get over the fear factor

Most people find it stressful and embarrassing to speak to their lender when they are having trouble with their mortgage repayments. Or they worry that raising the issue could have a negative impact. But remember, getting into financial difficulty is something that could happen to anyone. The important thing to keep in mind is that by taking action quickly, you can stop a small problem from becoming a big one.

Options to discuss

If you think your problems are short term and can be sorted out fairly quickly, your lender can help you by changing the terms of your loan. This is called a 'hardship variation' - see how to apply for a hardship variation. Depending on when you took out your loan, there are different thresholds (maximum amounts allowed) for accessing a hardship variation - see hardship threshold.

Here are some of the options you could discuss with your lender:

  • Extend your loan period, so you make smaller repayments over a longer period
  • Postpone your repayments for an agreed period
  • Extend your loan period AND postpone your repayments for an agreed period
  • Other ways to make your loan repayments more affordable

If your problems are long term and your circumstances are unlikely to change then the lender may permanently agree to change your repayments. Just keep in mind that this will increase the total amount you will have to repay, as you will pay more in interest if you choose to pay off the loan over a longer period of time.

If you are not happy with your lender's response you can ask to speak to their internal complaints section.

Talk to the Ombudsman

If you are still not happy with the lender's decision, you can lodge a dispute (for free) with your lender's external dispute resolution (EDR) scheme - either the Financial Ombudsman Service (FOS) 1800 367 287 or the Credit and Investments Ombudsman (CIO) 1800 138 422.

Ask for help

Need more help? If you are unsure what to do or are having trouble negotiating with your lender you can get free, confidential help from a financial counsellor.

Video: Tran sees a financial counsellor

Mortgage Help 2 video

Find out how a financial counsellor helps
Tran when he struggles to make his
mortgage repayments.

Transcript: Tran sees a financial counsellor

Things to watch out for

If you start to struggle with your mortgage, there are some strategies that may not be an instant fix and could even make your situation worse:

  • Borrowing more money or using your credit cards - If your existing loan is already becoming unaffordable, you don't want to get yourself deeper into debt. See trouble with debt.
  • Borrowing from family and friends - While this may work for some people, it can add to your debts plus you'll have the social pressure of owing money to your loved ones. See loans involving family and friends.
  • Refinancing or consolidating your debts - If you are thinking about rolling all your loans into one, know the risks involved and watch out for hidden costs. See debt consolidation and refinancing.
  • Switching home loans - Be aware that it may take some time for you to recoup the costs of switching. See switching home loans.
  • Accessing your super - You can only do this in limited circumstances. This is a last resort and should only be considered if it will save your home. See getting super early.  

Don't struggle in silence. If you start to have difficulty with your mortgage, approach your lender as soon as possible to discuss changing your repayments.

Related links

Last updated: 13 Jul 2016