Mortgage stress: How to get your repayments under control in 90 days

Financial experts and the big four banks reveal what homeowners should do right now to pay their mortgage – and how to get back on their feet in just 90 days.

Financial experts are expecting to see bankruptcies and home repossessions rise in the next few months as people start to default on ‘buy now, pay later’ loans taken out during Covid and homeowners are unable to make mortgage payments.

It comes as banks have begun urging customers to come to them for help sooner, rather than later, so they can put payments on pause or restructure loans or payments before the situation becomes unmanageable.

“What we see is that 90 per cent of customers that get in touch with us early, get back on their feet within 90 days,” NAB’s lead financial counsellor support Anita Murphy De Guzman said,

“So generally, the earlier they reach out for help, the sooner we can help and the better for them in the long run,” Ms Murphy De Guzman said.

Anita Murphy De Guzman, lead financial counsellor support at NAB. Credit: Anu Chitrathomas

She said some customers may feel fearful, nervous or potentially embarrassed to call the bank, but they were there to help and that repossessions were “very, very rare”.

The bank also provides access to free, independent financial counsellors.

She said NAB Assist, the department that helps customers with their finances, now has a team of 600 having expanded during Covid.

“We are also trained in assisting customers with empathy and care and listening out for potential signs of vulnerability,” Ms Murphy De Guzman said.

Financial Rights Legal Centre spokeswoman Jane Foley said they were expecting to see an uptick in people seeking advice in the next few months.

She said some people who had taken out three, four or even five ‘buy now, pay later’ loans during Covid, were now defaulting.

Jane Foley, acting director of casework at Financial Rights Legal Centre in Sydney pictured today. Picture: Sam Ruttyn

Others were seeking help for bankruptcy claims from strata companies, cracking down on those with outstanding rates bills.

And, while the Morrison government banned banks from repossessing homes during Covid, with the end of lockdowns and interest rate rises, Ms Foley said that was about to change.

She urged people worried about their finances to seek help from a free financial counsellor as soon as possible.

And she warned people not to be tempted to get their credit report “cleaned” by rogue companies, or get their debts rolled into one, as often those businesses “have an agenda”.

“If you are experiencing temporary financial hardship, banks legally have to help you,” Ms Foley said.

However, she said it was best that homeowners seek financial advice first so that they don’t agree to new terms they can’t meet.

https://financialrights.org.au/

WHAT TO DO IF IN FINANCIAL STRESS

• Seek help from a free financial counsellor by calling 1800 077 077
• Contact your bank as early as possible, even before defaulting if possible
• Make sure the new agreement is affordable, renegotiate if not
• If the bank does not offer a hardship plan, you can appeal

WHAT NOT TO DO

• Don’t refinance without talking to your bank first
• Avoid debt solution companies that offer to roll all the debt into one
• Do not be tempted into getting your credit record cleaned

BANKING ON HELP

Commonwealth Bank Signage at a branch in the Sydney CBD. Picture: NCA NewsWire / James Gourley

Commonwealth Bank

*The Financial Assistance Solutions team offers help with credit card and loan repayments, not money to cover other debts or bills. For short term assistance call 13 30 95, for long term assistance call 1300 720 814

*Get a quick response on short term help, for example over a month or two, via the virtual assistant in the CommBank app

*Go to commbank.com.au for helpful tips on, creating a budget, where to start with debt, and protect yourself from hoaxes and scams.

*Get a financial health check by finding your Financial Wellbeing Score in a 10 question survey

*Track your expenses with Spend Tracker via the app and see what you’re spending your money on

*Get a lower variable rate loan by going ‘green’

*Contact [e-mail]

Westpac Bank signage seen in the CBD Sydney Australia. Picture: NCA NewsWire / Gaye Gerard

Westpac

*Westpac Assist can help if you are worried you can’t make a payment, customers can apply online.

*The Customer Solutions team can help with financial hardship and getting back on track. If you miss a payment call 1800 067 497

*Westpac points to the Salvation Army Doorways emergency relief which can help identify and solve long-term economic hardship

*Add a gambling block on your debit or credit cards

ANZ bank in Rundle Mall, Adelaide, SA. Picture: NCA NewsWire / Naomi Jellicoe

ANZ

*Get your Financial Wellbeing Score in 5 minutes and access tools and tips

*Take a flexible education program for adults called MoneyMinded to help build money management skills

*Build your own budget planner

*Learn how to spend your money mindfully

*How to spend your money using the 50/30/20 rule, 50 per cent goes to needs, 30 per cent wants and 20 per cent goals.

*Apply for hardship assistance through the website, anz.com.au/support/financial-hardship/

*Call 1800 252 845 if you need help with the application

National Australia Bank, Pirie Street, Adelaide. Picture: NCA NewsWire / Kelly Barnes

NAB

*NAB Assist offers financial assistance via 1800 701 599 or via the website

*Get tips on how to manage your home loan

*Use NAB’s Budget Planner Calculator to help manage your money

*Find out your Money Mindset and whether you are a dollar stretcher, impulsive spender, goal driver saver or habitual saver

*A Customer Care Kit offers links to external support for debt, gambling, employment, domestic violence and mental health

*There’s a dedicated indigenous Customer Support Line 1800 966 100

*NAB partners with Good Shepherd to provide no and low interest loans to help Australians living on low incomes purchase essential goods and services like household appliances, medical expenses, cars or computers

Originally published as Mortgage stress: How to get your repayments under control in 90 days