COVID -19 changes: Home loans

The Coronavirus (COVID-19) pandemic is a challenging time for everyone in Australia (and the world). This is a guide about managing your home loan if you have been financially impacted by the pandemic.



On this page:

  •  Six changes you need to know about

  •  What do the changes mean?

  •  Six month deferrals

  •  When negotiating with your lender

  •  If the lender will not agree to a repayment arrangement

  •  Speak to a financial counsellor


Six changes you need to know about

  1. Many lenders have announced they will be flexible in making repayment arrangements. Banks and customer owned banks have both announced specific assistance measures for people with home loans who may be experiencing financial hardship.
  2. Many lenders will be offering six months deferrals, with a review after three months
  3. The flexibility means that you can negotiate reduced repayment arrangements as well as reductions in fees and possibly interest
  4. Lenders are also more likely to limit or slow debt collection and enforcement action (including repossession) (although this is not guaranteed)
  5. The Government has introduced changes to limit the ability of creditors to force you into bankruptcy before 25 September 2020. See COVID 19 Bankruptcy [link].
  6. The Australian Financial Complaints Authority (AFCA), which is the free dispute resolution body, has a significant event hotline 1800 337 444 for individuals financially impacted by the COVID-19 pandemic.


What do the changes mean?

It means that if you are struggling financially, you should contact your lender to make a repayment arrangement you can afford.


Six month deferrals

Many banks have offered people a six month deferral of loan repayments. You may already have agreed to a six month deferral. Deferrals (sometimes called forbearance or moratoriums) do not stop interest and fees being charged.

As your home loan is usually your biggest, most expensive and highest priority debt it is a good idea to try and make some repayments if you can, rather than fully defer them. But depending on your circumstances this may not be possible.

If you are considering a six-month deferral or have already agreed to one, consider changing that agreement to an affordable repayment arrangement. That way, you can make sure your loan balance remains manageable in the longer term. The aim should be to own your home by repaying your home loan.


When negotiating with your lender/creditor

  • Tell your lender how you have been affected by the pandemic
  • Tell your lender or creditor if you are receiving the JobSeeker payment or JobKeeper payment
  • Make a repayment arrangement you can afford
  • Negotiate the highest repayments you can afford on your home loan, so that you don’t fall too far behind


What to ask for when you negotiate a repayment arrangement

Try to negotiate the following as part of any agreed repayment arrangement:

  • Affordable repayments
  • Late fees and default/legal fees not to be charged
  • If at all possible, make higher repayments when your income recovers to catch up on any missed repayments (and the additional interest that will have been charged)
  • Ask that your credit report is not affected. You can do this by asking that your payment history information is marked as paid and that no default is listed while you keep to any agreed repayment arrangement
  • Request that any repayment arrangement be reviewed later on. This will be in case you need to ask for it to be extended as it is unknown when you can return to making the normal repayments (for example, because you are unemployed).


If your lender will not agree to a repayment arrangement

If your lender will not agree to a repayment arrangement for your home loan, you can have that decision reviewed in the Australian Financial Complaints Authority. This is a free and independent dispute resolution service. You can contact AFCA on 1800 931 678.


Speak to one of our financial counsellors

If your problem still hasn’t been solved, or you’re feeling overwhelmed, call us on 1800 007 007 to speak with one of our financial counsellors.




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