Financial Difficulty Support

Sometimes referred to as a mortgage holiday, a payment deferral allows you to temporarily pause your mortgage repayments if you've lost your job, been stood down, or otherwise cannot afford to pay. Your lender will defer repayments for a set period under their own rules and conditions. However, it's important to understand that interest continues to accrue during the deferral period. Depending on your lender, the accrued amount may be added to the end of your loan or charged once the deferral ends. Either way, your loan balance and ongoing repayments are likely to increase as a result.

When your repayments are paused, your lender still calculates interest on the outstanding balance and adds it to your loan. This means you end up paying interest on interest. Once you resume repayments, your lender will recalculate them based on the new, higher balance so that you still repay the loan within the original term. Your repayments will be higher than before. That said, refinancing after the deferral period may help you reduce repayments by extending the loan term or securing a lower rate.

The first step is to contact your lender's hardship team directly. Try not to panic or spend hours waiting on the general customer service line - ask specifically for the hardship department. Your lender is legally required to respond to your application within 21 days. While we as brokers cannot submit a hardship application on your behalf, we can help you understand the process, explain your options, and once the hardship period is behind you, work with you to find a longer-term solution such as refinancing to a more suitable loan.

There are several situations where refinancing could make sense. If interest rates have moved, you may be able to secure a lower rate with a different lender. If you're not using features like an offset account, switching to a simpler product could save on fees. You might also consider consolidating debts such as credit cards, personal loans, or car finance into your mortgage to simplify repayments and potentially reduce interest costs. If you're coming out of a hardship period and your finances have stabilised, refinancing can help you reset to more manageable repayments. We compare 50+ lenders to find the right option.

The right choice depends on your circumstances. A payment deferral is a short-term arrangement you make directly with your lender to pause repayments during a temporary period of difficulty. Refinancing is a longer-term strategy where you move to a new loan with more favourable terms. If your hardship is temporary - for example, a short period between jobs - a deferral may be the right first step. If your situation has changed more permanently, or you're looking to restructure your debt after a deferral, refinancing may provide a better long-term outcome. We can talk through both options with you.

There's no one-size-fits-all answer - it depends on your financial situation and goals. A fixed rate gives you certainty that your repayments won't increase for the fixed period, which can be helpful if you're managing a tight budget. On the other hand, variable rates are often lower than fixed rates and give you more flexibility to make extra repayments or access features like an offset account. If rates are trending downward, fixing could mean you miss out on future reductions. We can help you weigh up the pros and cons based on current market conditions and your personal situation.

Turnaround times vary across lenders. Some continue to process applications within a few days from lodgement to decision, while others have experienced longer delays - sometimes measured in weeks rather than days. These delays are often related to capacity constraints rather than a shortage of available lending. We monitor turnaround times across all 50+ lenders on our panel and can factor this into our recommendations if you're working to a timeline.

If your tenants are experiencing financial difficulty and unable to meet their rent, it can directly impact your ability to service your investment loan. You can contact your lender to discuss hardship options or negotiate a payment deferral on your mortgage. Once the situation stabilises, we can help you review your loan and explore whether refinancing or repricing to a more competitive rate could improve your cash flow position. We can also outline the costs involved in switching lenders versus staying put.