I Can’t Pay My Mortgage

If you have received a default notice, do not ignore it – talk to your lender and contact our financial counselling service immediately

COVID 19 – Some banks are offering six-month repayment deferrals on mortgages for customers impacted by coronavirus. Talk to your bank about how they can help you.

Falling behind on your mortgage is always a difficult time. All lenders have special hardship teams to help customers experiencing financial stress.

The first step is to contact your bank or financial institution and ask to speak to the ‘financial hardship’ team. Explain that you are unable to make your usual payments and are waiting to see a financial counsellor.

You may be able to change the terms of your loan, or temporarily pause or reduce your payments. This is called a ‘hardship variation’. It’s important to know what you want to ask for and be realistic about what you can afford. Your options may include a temporary decrease in payments, deferring payments for a short period, or extending the terms of your loan to make repayments smaller.

Other tips:

  • Make your request in writing and keep a copy. If talking about your options over the phone, keep a record of the time and date of the conversation along with the person’s name and any action to be taken.
  • Request a hardship variation in writing. Use the Financial Rights Legal Centre’s Request for Hardship Variation sample letter and keep a copy of the letter you send.
  • Ask to reduce your payments to the minimum payable if you are currently ahead with your repayments
  • Keep paying what you can. Even if it’s not enough to cover the contracted payment, it can make a difference if you’re trying to keep your property.
  • Think about accessing your superannuation (see fact sheet 8) to catch up your arrears.
  • Make a plan. An ongoing plan can help so you don’t fall behind again.

If you can’t reach an agreement with your bank or financial institution, contact Anglicare Victoria’s financial counselling service immediately if you do not already have an appointment booked.

Do I need to sell my home?

You may need to consider selling your home if:

  • You cannot afford your loan repayments
  • You will be unable to afford your loan repayments for some years to come – i.e. your current circumstances are not likely to change.

You need to make this decision as early as possible, because you will be better off selling your home yourself rather than having the lender sell the home for you. You are more likely to get a better price for your home and avoid lots of legal costs if you sell your own home. If you think your home may be worth less than the amount you owe on your home loan, get legal advice.