Struggling With Repayments? Your Hardship Options Explained

The short answer

Life doesn’t always go to plan. If you’re finding it hard to keep up with your home loan repayments, you’re not alone, and you have options.

The most important step is to act early. The sooner you reach out, the more options are available to you.

What hardship means

Financial hardship is when something unexpected makes it difficult to meet your repayments, usually for a period of time. Common causes include:

• Illness or injury
• Losing your job or a drop in income
• Separation or divorce
• A natural disaster
• Caring for a family member

Your rights, and why acting early matters

Under Australian credit law, you can ask your lender to change your loan terms because of hardship. It’s free to apply, and your lender must respond to your request within set timeframes, generally 21 days.

Don’t wait until you’ve missed a repayment. Contact your lender, or us, as soon as you can see trouble coming. Acting early gives you more options and helps protect your credit record.

The options available

Depending on your situation, your lender may offer:

Option	How it works
Repayment pause	Repayments stop for a short period, often a few months
Reduced repayments	You pay a lower amount for a set time
Interest only	You pay just the interest for a period, so repayments drop
Longer loan term	Spreading the loan over more years to lower repayments

Keep in mind: interest usually keeps adding up during a pause or reduced repayments. That can increase the total you repay over the life of the loan, and your repayments may be higher once the arrangement ends.

How it may affect your credit record

A hardship arrangement can still have an impact on your credit record:

• Missed payments: repayments missed before an arrangement is in place, or not made as agreed under it, may be recorded as missed payments.
• The arrangement itself: hardship arrangements are recorded on your credit report for 12 months, and other lenders can see this when you apply for credit.

This is another reason to act early, and to talk to us about how it could affect future plans like refinancing.

Other options to consider

• Use your buffers: savings in your offset or redraw can help cover repayments for a while.
• Restructure or refinance early: while your credit record is still clean, it may be possible to restructure your loan or refinance to more manageable repayments.
• Review your budget: look for legitimate ways to reduce spending while things are tight.
• Selling: if the situation is longer term, selling on your own terms is usually better than being forced to later. We hope it never comes to that, but it’s worth knowing the option is there.

Free help and where to turn

• Your lender’s hardship team: your first point of contact for a hardship arrangement.
• National Debt Helpline: free, confidential financial counselling on 1800 007 007.
• Australian Financial Complaints Authority (AFCA): if you’re unhappy with how your lender handles your request, AFCA offers a free, independent complaints service.

We’re here to help

If repayments are becoming a struggle, please reach out. There’s no judgement, and the earlier we talk, the more we can do. Our team can review your situation, explain your options, and help you work with your lender.

Book a chat · Back to the Masterclass

All Masterclass lessons

General information only. This article does not consider your objectives, financial situation or needs and is not credit, financial or legal advice. Hardship options vary by lender and circumstance. For free financial counselling, contact the National Debt Helpline on 1800 007 007. Insight Property Finance.