Missed a mortgage repayment

Missing a repayment, not the end of the world

You might think that missing a mortgage repayment is a pretty bad situation. But the good news is that it's not the end of the world and you do have options. By acting fast, you can get your mortgage payments back on track.

Here are some simple things you can do to get a recovery plan in place.

Contact your lender

If you miss a mortgage repayment, the first thing to do is contact your lender. Your lender must assess and respond to your request.

Explain to your lender:

  • Why you missed a repayment
  • How you plan to catch up (can you find the money now or pay back what you owe over the next few months?)
  • What they can do to help you get back on track 

Video: The Da Silvas miss a mortgage repayment

Mortgage help - talk to creditors video

When Ernesto Da Silva loses his job he misses a repayment on his mortgage.

Find out how he and his wife decide to talk to their lender about their situation.

Get over the fear factor

Most people find it stressful and embarrassing to talk with their lender about why they missed a mortgage repayment. But remember, getting into financial difficulty is something that could happen to anyone. Taking action quickly means you can stop a small problem from becoming a big one.


The money you owe is called 'arrears'. This is the term your lender is likely to use when speaking to you.  

Video: The Da Silvas go to the bank for help

Mortgage help - hardship variation video

Find out what the bank says when Rosa Da Silva contacts them about missing a mortgage repayment and she asks for a hardship variation.

Create a budget

If you have missed a mortgage repayment, getting a clear picture of where your money is going will help you to better manage your debts.

Set up your budget to make sure your money goes where you want it to.   

Budget planner

 For more tips see how to do a budget.

Your options

Here are your options if you have missed a mortgage repayment.

Bring your repayments up to date

Do this if you can find the money or sell some assets to raise the money.

Smart tip

Before you come to a new agreement with your lender, be realistic about what repayments you can afford.

Change the terms of your loan

If you think your problems are short term and can be sorted out in 3 months, your lender can help you by changing the terms of your loan. You can ask them to temporarily reduce your repayments or delay your repayments. This is called a hardship variation

If your problems are long term and your circumstances don't look like they will change, you may need to consider selling your home. See behind on your mortgage for the steps the lender can take.

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 satisfied with the lender's decision you can contact a free external dispute resolution scheme. Your lender must tell you which one of these two schemes it belongs to: Financial Ombudsman Service (FOS) - 1800 367 287 or Credit and Investments Ombudsman (CIO) - 1800 138 422.

Video: How dispute resolution works

Mortgage help - Dispute resolution video

Find out how dispute resolution works with your lender. If you are not happy with your lender's decision you can take your complaint to the Financial Ombudsman Service (FOS) or the Credit and Investments Ombudsman (CIO).

Claim on your insurance

If you took out unemployment, accident or sickness insurance when you got your loan, you may be able to claim on that insurance. Check out your policy or call your insurer to see if your policy covers your current circumstances.

Smart tip

If you have other personal loans or credit card debts and you can't pay them, contact your credit providers to negotiate a payment plan.

Get help from utility billers

If you are having trouble paying your water, phone, gas or electricity bills and this is affecting your ability to pay your mortgage, contact your utility providers. See if you can negotiate a better repayment arrangement with them. See dealing with utility bills.

Sell your home and buy a cheaper one or renting

If your repayments are no longer affordable, you may have to seriously consider selling your home and downsizing or renting. Of course this will take time to arrange, so you will still need to negotiate a plan with your lender about how you intend to manage this. This decision is one that requires careful thought and planning, so make sure you take stock of the options and seek advice.

See our case study on equity stripping on the pitfalls to avoid.

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 avoid

If you start to struggle with your mortgage, there are some strategies that could make your situation worse. Try to avoid:

  • Borrowing more money or using your credit cards - If your existing loan is already 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 consolidating and refinancing debts.
  • 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.

If you have missed a repayment, it is important to think further than just the next repayment. Put a plan in place straight away so that you can afford your bills and get back on track.

Related links

Last updated: 03 Apr 2018