MoneyQuestion’s in Park Ridge
If you took steps to pause your repayments on your home loan, you should DEFINITELY continue reading.
The media has been saturated with news about COVID-19, virus outbreaks, government policies and restrictions. The current climate has been turbulent and the news can be pretty exhausting. To give you all a breath of fresh air, I wanted to share what YOU can do and the options available for Australians who have felt the brunt of this pandemic.
I collated my top 5 questions that I have been hearing the most during this tough period – so more than likely this information could help you too:
- I have paused my payments on my home loan, what exactly happens to my repayments? Do I just stop paying and that’s it?
You will NOT be required to make any repayments during the pause period but… this is the important part: Interest will continue to be charged to your loan and since you are making repayments; the unpaid interest will be added to your home loan (capitalised) and you may end up paying more interest over the life of your home loan.
- Are all lenders offering their customers the opportunity to pause repayments for up to 6 months?
Unfortunately, not, while most banks are offering a repayment pause of up to 6 months, non-bank lenders are assessing all hardship enquiries on a case by case basis.
- I heard some lenders are offering cashback offers? How do I get this and who is offering them?
If you are eligible some lenders are offering up to $4000 cashback by refinancing your home loan with them. ANZ, Suncorp, Virgin Money, CBA and Westpac are some lenders that are offering this. As always, there are terms and conditions to these cashback offers so MAKE SURE you double-check them.
- Is a repayment pause available on both home loans and investment property loans?
Yes, it is. Owner-occupiers and investors financially affected by COVID-19 who have either principal and interest or interest-only repayments are eligible for this.
- What happens at the end of the pause assistance period?
At the end of the COVID-19 assistance period your home loan repayments will start again. Some lenders are offering two options to catch up on the repayments that were paused:
- extending your loan term by a period equal to the duration of the assistance provided and adjusting your repayments accordingly, or
- retaining your original loan term and adjusting your repayments to ensure you pay your loan off over the original loan term. Although, the majority of lenders are only offering option 2.
Although, it seems like a never-ending nightmare for some – hang in there the light at the end of the tunnel is fast approaching us (well, at least in Australia…). There are options out there to help you, your friends and your family – unfortunately, some of us do not know where to start to seek help. If you know someone that may be in the dark, help them out and share this article.
Steve Foulis is a qualified finance and mortgage broker and the owner of Money Quest Park Ridge.
You can contact him for more information at:
p: 0433 366 550