Deferred your home loan? Here’s how to reduce your repayments
If you’re one of the half a million Australian homeowners^ who deferred their mortgage at the start of the COVID-19 pandemic, then your home loan holiday could be coming to an end soon.
What’s more, even though you’ve not needed to pay off your loan, it’s still accumulating interest. Basically, you now have more debt than when you paused your repayments.
But there is some good news. Interest rates are at record lows, meaning there’s never been a better time to look at refinancing your home loan with Rate Comparison. Click below to get started.
Here’s How You Do It:
Step 1: Select your State below.
Step 2: After answering a few questions, you will have the opportunity to compare competitive rates and could be eligible for significant savings.
Home loan holidays: how did we get here?
The global pandemic hit the Australian economy hard. In the face of mass job losses and uncertainty about the future, banks offered homeowners a six-month mortgage holiday to ease the burden on those worried about keeping up with their repayments.
But we’re now approaching six months on from the point COVID-19 changed everyday life as we know it. And that means banks will be starting to ask homeowners to start paying off their home loan.
Not everyone will have to start paying. People in severe financial hardship can apply for a four-month extension but most home loan holders will be required to resume their mortgage repayments.
So if my mortgage deferral is ending, what happens next?
Your lender will contact you shortly to arrange the resumption of your mortgage repayments.
If you’re unable to resume repayments, ASIC* is instructing lenders to “offer assistance that genuinely meets the needs of each consumer.”
What can I do about it?
The bad news is that interest on your home loan has still been accruing during the mortgage holiday.
Even if it’s a scary thought, resuming your mortgage payments as soon as you can will help to prevent a mounting interest bill that you’ll need to pay off eventually.
The good news is that if your lender comes knocking with repayment requests, you do have options.
While interest rates remain at record lows, one option is to find a better deal on your mortgage with another lender.
Mortgage providers will likely see this as an opportunity to win more clients from their competitors with better deals, and refinancing your home loan with a new lender at a lower interest rate could significantly reduce your mortgage repayments.
Get Started Now:
Step 1: Select your State below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.
How can I find a better deal on my home loan?
Comparing lenders to find the best deal for you is easy with Rate Comparison.
We’ll compare mortgage options across 37 lenders to find the home loan offer that provides the best bang for your buck.
The mortgage holiday may be coming to an end, but that doesn’t mean you should be overpaying on your home loan.
Compare lenders with Rate Comparison and find the best deal to reduce your mortgage repayments.
*ASIC, ASIC publishes expectations of retail lenders when loan repayment deferrals end, August 2020.
^APRA, Temporary loan repayment deferrals due to COVID-19, July 2020
This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.