Struggling to meet your mortgage repayments?
If you are finding it difficult to meet the repayments on your mortgage act as quickly as you can. You shouldn’t be embarrassed or intimidated to talk to your lender. You might think that this will alert them to your problems and you will be worse off, but this isn’t the case.
For many Australians, their home is their biggest asset and their home loan is their biggest financial commitment. Most people also have strong emotional ties to their home. You might need some personal support to help you at this time.
Principles for a common approach to borrowers facing financial hardship
All retail banks, building societies and credit unions have signed up to the Government's Principles to assist borrowers who are experiencing financial difficulty as a result of the global recession.
See the Treasurer's announcement in full.
Options for assistance that the banks can offer include:
- Postponement for up to 12 months on repayments
- A longer contract with lower repayments
- Making interest only repayments for a short period of time
- Fee waivers
Bank customers can contact your bank on the numbers below:
| Bank | Bank contact details for customers |
| ANZ | 1800 252 845 |
| AMP Banking | Mr John Gabriel, Team Leader
Credit Services
Telephone: (02) 9768-4311
Call Centre
13 30 30 |
| Arab Bank Australia | Ms Raghida Younes
Senior Manager
Marketing and Communications
Tel: (02) 9377-8978
Email: raghida.younes@arabbank.com.au |
| Bank of Cyprus | Customer Service
Telephone: 1300 660 550 |
| Bank of Queensland | Customer Relations
Telephone: (07) 3212-3240 |
| BankWest | Customer Relations
13 17 18 |
| Bendigo & Adelaide Bank | Mortgage Help Centre
1 300 650 259 |
| Citibank | Customer Service Centre
13 24 84 |
| Commonwealth Bank | 1300 720 814 |
| HSBC Bank | 1300 555 988 |
| ING Direct | Andrew Spagnolo
Asset Management Specialist: 133 464
Email: collections.hardship@ingdirect.com.au
Rebecca Madeira
Asset Management Specialist: 133 464
Email: collections.hardship@ingdirect.com.au |
| Investec | Robert Westgarth
Telephone: 1300 131 141
Direct: +61 2 9293 2021
robert.westgarth@investec.com.au |
| Laiki Bank | Customer Relations
02 8262 9000 |
| National Australia Bank | 1300 661 114 |
| St George | 1800 629 795 |
| Suncorp Bank | 1800 225 223 |
| Westpac Assist | 1800 067 497 |
Credit unions and building societies customers:
Contact your financial institutions via the industry body ABACUS on 13 11 28, or visiting the ABACUS website at www.abacus.org.au.
Helping home borrowers in financial hardship
ASIC has looked at the way lenders and mortgage brokers respond to borrowers in financial hardship.
Download the report
The report looked at the processes and procedures lenders and brokers have in place to deal with customers having difficulties meeting repayments on their mortgages. ASIC looked at how financial hardship assistance is promoted, identified and determined by different lenders and brokers.
The report found practices are inconsistent and vary greatly among industry players. The report sets out examples of good and poor practices. It aims to provide guidance to industry on how to improve practices when dealing with customers experiencing financial difficulties. The report also sets out guidance for borrowers if you are experiencing financial difficulties (refer to pages 42-43 of the report).
Are your financial difficulties temporary?
| Yes |
- You should talk to your lender and work out what you can realistically pay towards your loan now.
- If it is likely that you will be able to make your loan payments in full at some stage in the near future, your lender may be able to provide you with temporary relief from making the current payments on your loan.
|
| No |
- You need to carefully consider whether you can afford to keep meeting the repayments on your mortgage.
- If you cannot successfully demonstrate to your lender that you will be able to pay your loan off in the long run, they are unlikely to negotiate a payment arrangement with you.
|
| Not sure |
|
Your rights and responsibilities
| Rights |
- If your loan is covered by the Uniform Consumer Credit Code (UCCC), it's your legal right to ask your lender to enter into a variation on the grounds of financial hardship. However, a lender will only agree to this if you can demonstrate that you will be in a position to make regular repayments and pay your entire loan off in the long run. More information on the UCCC.
- Don't be pressured into accepting a repayment plan that you know won't work for you.
- If you're not happy with the outcome of your request for a hardship variation, you can complain to an external dispute resolution scheme or tribunal. See FIDO's guide to making a complaint.
|
| Responsibilities |
- If you agree to pay less now, or even pay nothing for a period of time, you still are required to pay your entire mortgage and all the interest. It is important that you understand what impact and cost this decision will have on you, not just now but further down the track.
- When talking to your lender, always be honest about your financial situation. Otherwise, you may find the help you receive is not enough and you could end up worse off.
|
Should you refinance?
If you get into difficulties managing the repayments on your home loan, chances are you'll try anything to avoid selling up, including options like refinancing your loan. Some brokers even use adverts and slogans designed to grab your attention if you are in a situation of mortgage stress. But it's essential to do your homework before you commit to a new finance arrangement, otherwise you could end up in an even worse situation.
See Protecting the equity in your home.
More information
ASIC releases financial hardship report (Media Release)
FIDO Website: Printed 07/31/2010
