As COVID-19 continues to impact our daily lives, some Australians might be struggling to manage their mortgage payments.
Although this can be stressful, there are options available.
Check your current repayments
Over recent months there have been several interest rate cuts, which may have reduced your minimum monthly repayment amount.
Whether your repayments were updated automatically to reflect this change will vary from lender to lender. You may find that you’re paying more than the minimum required.
While making higher repayments will help you pay off your home loan sooner, reducing them could give you the relief you need.
Move to interest-only
If you’re making principal and interest payments on your home loan, switching to interest-only could be an affordable option until conditions improve.
Changing to an interest-only mortgage can help free up extra cash, as you only pay the interest accruing on the loan.
It’s important to note that when you revert back to principal and interest, your regular payments will increase as you pay off a larger sum over a shorter time.
If your circumstances have put you in financial hardship, you may be eligible to pause or reduce payments on your home loan for a period.
While this can be a helpful option for those in hardship, be mindful that interest continues to accrue and that your loan repayments will be higher following the deferral period.
Talk to your lender
Your lender may be able to offer support tailored to your circumstances. For information specific to your situation, contact them directly.
For a review of your finances and what other options could be available to you, contact a Liberty Adviser.