My mortgage is suddenly too much to pay, what are my options?

If you’ve suddenly found yourself struggling to make your mortgage repayments due to the current crisis, there are a few things you can do to ease some of that stress. 

Along with the usual avenues that are available to customers experiencing financial hardship, banks have announced a raft of support measures to help hard-hit Australians. We take a look at these and other options available to mortgage holders below. 

Defer your mortgage repayments

Following the Reserve Bank’s emergency rate cut in March, banks have stepped up to help mortgage holders out of the red. One way they're doing this is by allowing customers who have lost their jobs or income as a result of the coronavirus pandemic to defer mortgage repayments for up to six months.

But before you rush to take advantage of this, keep in mind that interest will continue to accrue on your loan throughout the deferral period. This means once those six months are over, your outstanding balance will have increased, and your bank will either increase the length of your loan or adjust the size of your repayments to accommodate this.

Access your loan’s redraw facility

Many lenders allow you to make extra repayments on your home loan (which can be unlimited or capped at a certain amount each year). If you’re ahead on your loan, you might be able to retrieve those extra funds using the redraw facility available on your loan. 

Use your offset account

An offset account functions like a savings account or transaction account but with one key difference: it offsets the balance in the account against the balance of your home loan. Not all home loans come with this feature, but if yours does and you’ve been making use of it, it might be worth dipping into those funds to cover your future repayments.

Adjust the size of your repayments

If you’re already paying more than the minimum amount each month, you’ll have the option to decrease the size of your direct debits so that they better suit your current circumstances. Many banks will allow you to do this via your banking app. Alternatively, you can also use online banking or chat to a customer service specialist over the phone.

Ask your lender for a lower rate

Even in normal circumstances, it’s a good idea to regularly review your home loan to make sure you’re not paying more than you need to be. To make sure you’re in the best possible position to haggle, do a little digging and find out what your lender is offering new customers, then take a look at the kinds of rates available elsewhere on the market.

Assuming your job is secure and you haven’t missed any repayments on your loan thus far, this will give you a bit of leverage when it comes to negotiating a lower price. Whether or not your lender will grant your request will depend on a number of factors, but if you show them you’ve done your research (and you’re prepared to walk), things could be tilted in your favour. 

Refinance your home loan

Another way to potentially shed hundreds of dollars off your monthly repayments is to refinance to a cheaper loan. Let’s say you’re paying off a $300,000 loan over 25 years at 3.50% p.a. interest, and your monthly repayments are around $1,501. By refinancing to a loan with an interest rate of 2.34% p.a. (the lowest variable rate in our database at the time of writing), you could see your monthly repayments drop to $1,322, saving you $179 a month.

Of course, you might have to jump through more hoops than usual to prove your creditworthiness in the current environment. Many banks have tightened their lending restrictions, particularly for workers in high-risk industries and casual, contractor and self-employed applicants. 

If you fall into one of these categories, you’ll probably have your work cut out for you. But if your job has been insulated against the worst of the current crisis and your credit score and financial health are in good standing, the road to refinancing should be quite smooth.

Is there any more help available?

In the last few months, the Federal Government has introduced multiple stimulus packages to help keep Australian households and businesses afloat. These include extra payments to eligible income support recipients, early access to superannuation, and subsidies for businesses to help keep employees on the payroll. 

For an overview of the kinds of support available, along with other tips to keep your finances in good health amid the current crisis, visit our coronavirus financial guide.

Home loan comparisons on Mozo

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Last updated 21 July 2024 Important disclosures and comparison rate warning*
  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Flexibility to choose your repayment schedule (weekly, fortnightly or monthly). Redraw facility available. Split your home loan into multiple loan accounts.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Flexibility to choose your repayment schedule (weekly, fortnightly or monthly). Redraw facility available. Split your home loan into multiple loan accounts.

  • Fixed Rate Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Fixed 3 years
    Comparison rate
    6.15 % p.a.
    Initial monthly repayment
    $3,027

    Additional repayments of up to $10K per fixed year. Interest rate discounts available. Waiver of $499 application fee when combined with an Orange Advantage Home Loan.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.54 % p.a.
    Fixed 2 years
    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

image of houses

Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

Learn more

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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