Repayment pause FAQs

While you are in a repayment pause, you will not be required to make any repayments to your home loan, i.e. Principal and Interest or Interest only repayments. This means the balance of your loan will increase based on your missed repayments and accrued interest. We would expect you will make up any repayments not made during the repayment pause period over the remaining term of your loan, or extend the term of your loan depending on your financial circumstances.

Example

Janice’s home loan balance is $241,841. She has a remaining home loan term of 25 years and 3 months. Her interest rate is 3.55% p.a and her weekly repayments are $277.41.

Due to financial difficulties Janice requests a repayment pause for three months. The repayment pause is granted and Janice makes no repayments on her home loan for three months. During this time interest continues to accrue on her home loan and gets charged to her home loan account each month. At the end of the three months, Janice’s home loan balance has increased to $243,987 due to interest being charged and no repayments being made.

After three months, the remaining term of the home loan is 25 years and Janice is in a financial position to recommence home loan repayments.

Her repayments will increase from $277.41pw to $281.98pw to ensure the load is paid off over the remaining contracted term.  

A repayment pause gives you time to take the steps to get back on track, but it’s important to note you will end up paying more interest over the life of the home loan. This is because the interest will continue to accrue and will be added to your outstanding balance.

We encourage you to talk to us if you have any questions or want to discuss the long-term impacts of a repayment pause.

Lenders Mortgage Insurance gives Members the opportunity to purchase a property without a 20% deposit. It makes it possible for us to support your purchase, while protecting us from a loss if your property has to be sold and is sold for less than the amount owing on the home loan.

Lenders Mortgage Insurance protects us from a loss. If there is an amount outstanding after the sale of the property, we may make a claim under the Lenders Mortgage Insurance. Helia Financial Mortgage Insurance Pty Limited (Helia) is the provider or underwriter of Lenders Mortgage Insurance. If Helia pay our claim, Helia may choose to recover the amount of the claim and any other costs directly from you.

It is important to note that Lenders Mortgage Insurance does not protect you or any guarantor. It should not be confused with Mortgage Protection Insurance which is a separate insurance policy that protects you if you are unable to make repayments on your loan. Therefore, Lenders Mortgage Insurance does not stop you from being liable for any shortfall that may arise if the sale of your property does not fully repay your debt to us.

If your home loan is up to date at the time you request a pause on your home loan repayments, your credit score will not be negatively impacted by the repayment pause. 

If your home loan is in arrears at the time of your request, we may need to treat you under our Financial Hardship program. Refer to our Financial Hardship FAQs for more information on financial hardship, credit scores and credit reports. 

Yes, you can still make one-off or partial repayments while your home loan is on a repayment pause. As interest continues to be charged to your home loan during the repayment pause period, partial payments will help reduce the amount of interest accrued.

We encourage you to make repayments in any amount you can afford during the repayment pause period.

Yes. If your circumstances have changed and you would like to cancel your repayment pause early, you can email us at any time to [email protected] or phone us on 1800 862 265, press 4 then option 4.

Your home loan balance will increase and your repayment amount may need to change due to your repayments being paused. This will ensure you pay off your home loan within its contracted term. 

We encourage you to talk to us if you have any questions or want to discuss the long-term impacts of a repayment pause.

Please get in touch so we can explore every possible option to help you get back on track.

If you can, it is our expectation that you will recommence making your contractual repayments. As everyone’s financial situation is different, we have a number of options to support you:

1. Recommence principal & interest loan repayments - your repayments will increase within your agreed loan term to make up for any missed payments during your repayment pause period. 
2. Request reduced principal & interest loan repayments and extend the term of your loan. If you have demonstrated that you can make some repayments on your home loan on a principal and interest basis, we can discuss this option with you. 
3. Request Interest only repayments. If you’re unable to recommence making your contractual repayments, but are at a minimum able to make interest only repayments for a limited period, we can discuss this option with you. Subject to Bank approval and loan qualifying conditions based on your individual circumstances.
4. Financial Hardship - if you are still facing difficulties and are unable to make any repayments at all, you can apply to us for financial assistance under our Financial Hardship program. 

If you determine that your financial position is unlikely to improve, you may be better off selling your property, or living somewhere else and renting out your property until you can afford the repayments again. 

Selling your property is a big step, so we recommend that you seek financial counselling or independent legal advice about this.

You can contact a financial counsellor or the National Debt Helpline on 1800 007 007 to discuss your current financial situation.

Every Member’s situation is unique, that’s why we encourage you to talk to us so we can work together to explore all your options.

With interest only repayments, you only pay the interest charged on the amount you have borrowed on your home loan. This means your repayments are only servicing the interest component of your home loan.

Example

If you have a home loan of $370,000 with a remaining term 25 years at a variable interest rate of 3.10% p.a, and you decide to make interest only repayments for one year, the total interest payable over the life of the home loan would be $166,478. If you remained on principal and interest repayments the total interest payable over the life of the home loan would be $162,166. By choosing to make interest only payments for one year the total extra interest cost is $4,312.

Yes, your credit report will reflect any missed repayments that you have not paid on your home loan after your repayment pause period ends. However, if your account is approved for the Financial Hardship program, we will instead report that a financial hardship arrangement is in place on your credit report. Refer to our Financial Hardship FAQs for more information on financial hardship, credit scores and credit reports.