Struggling with mortgage repayments: your hardship options

Talk to your lender early

Moneysmart's page on problems paying your mortgage (updated 2 October 2026) says your lender may change your loan terms, or temporarily pause or reduce your repayments. It calls this a hardship variation. To ask for one:

• Contact the lender's hardship officer or team.
• Give your loan details and say you are requesting a change because of hardship.
• Explain your situation and how long it may last.

You can give the notice verbally or in writing, according to ASIC's guidance on section 72 of the National Credit Code. Keep a record: the date, who you spoke to and what was said. If you can, follow a phone call with a written note.

What the lender must do, and how long it has

The National Credit Code section 72 covers hardship notices. Moneysmart and ASIC (INFO 105, page updated May 2025) set out these timeframes:

ASIC also says that if a change lasts more than 90 days, the lender must give you written notice of it. For a change of 90 days or less, no notice is required, so ask for the arrangement in writing anyway. Timeframes are set by law and can be changed, so confirm the current rules on the official pages listed below.

Types of change you could ask about

Moneysmart's page says a lender may change terms, or pause or reduce repayments. Which arrangements a lender offers differs. Ask the hardship team what each option would do to your balance and total interest. Common questions:

• Reduced repayments for a set period. What happens to the unpaid interest and when do normal repayments resume?
• A longer loan term. Repayments fall, but you pay interest for longer.
• Interest-only for a period. Repayments are lower while you do not pay down the loan. See interest-only home loans.
• Adding missed repayments to the loan balance. Ask whether arrears will be added to the balance, and what that does to your repayments and interest.

These options are examples to ask about, not a list from Moneysmart, and a lender may say no to any of them. Ask for the proposal in writing before you agree.

Free help

• National Debt Helpline: 1800 007 007. Moneysmart lists this number, and ndh.org.au says phone lines are open weekdays 9:30am to 4:30pm and live chat weekdays 9:00am to 8:00pm, and that financial counselling is always free and confidential.
• Beyond Blue: 1300 22 46 36, listed by Moneysmart as open 24 hours, if the stress is affecting your health.

Free counselling means you do not need to pay anyone to negotiate for you. Be careful with any business that charges a fee up front to deal with your lender or to "fix" your debt. The official pages above did not discuss debt agents, so this is a prompt to check, not a finding. Before you pay, check that the business is licensed on ASIC's registers and ask a free financial counsellor.

If you disagree with the answer

Moneysmart says to contact the lender's internal dispute resolution team if you are unhappy with its response. If you still cannot agree, you can contact the Australian Financial Complaints Authority (AFCA) for free, independent dispute resolution. AFCA sets time limits for complaints, so check afca.org.au for the current ones and act promptly. This guide does not state the limits because the AFCA page did not load when we checked.

Default, court and selling

Moneysmart says a default notice can be sent once a repayment is overdue, though lenders may wait until it is 90 days or more overdue. It gives you 30 days to pay the missed amounts plus the regular repayment. A court process can follow, and eviction does not release you from the debt. If you get a Statement of Claim or summons, get legal advice.

If your circumstances are unlikely to improve, Moneysmart says it is better to sell your home yourself than to have a lender take possession and sell it. Tell your lender if you decide to sell, and speak to a financial counsellor or get legal advice first.

Refinancing is only one possible option

A new lender must assess whether you can afford the loan, called serviceability, and missed payments or arrears can affect that. Refinancing may not be available. If it is, count the costs first. See how lenders assess serviceability, the real cost of switching and how to refinance. You can see current advertised rates on the home loan rate board, which are not offers to you.

What to do now

• Ring your lender before you miss a payment, if you can.
• Gather your income, expenses, debts and loan statements.
• Call the National Debt Helpline on 1800 007 007.
• Keep a written record of every contact.
• Do not ignore letters from your lender.