Keeping your mortgage on track
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
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?
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.
See how to do a budget for tips on
what to do and how to get help putting your budget together.
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
Speak to your lender
Contact your lender as quickly as possible if you are struggling
with your mortgage. The faster you contact them the more options
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
Here are some of the options you could discuss with your
- Extend your loan period, so you make smaller repayments over a
- Postpone your repayments for an agreed period
- Extend your loan period AND postpone your repayments for an
- 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
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.
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
- 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
- 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
- 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
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.
Last updated: 13 Jul 2016