Mortgage Relief Scheme

Last updated: 30 January 2015

What is the Mortgage Relief Scheme?

This scheme helps people that are having trouble paying their home loan after an unavoidable change in their lives. This could be because of short-term unemployment, sickness or some other circumstance that has reduced their income.

If you are eligible, you can get a short-term interest-free loan to help you make your mortgage repayments.

This scheme helps you until you can start making your scheduled loan payments or the agreed assistance period expires – whichever is the earlier.

Am I eligible for mortgage relief?

You are eligible if:

  • Your home loan repayments are more than 27 per cent of your gross income
  • Your original mortgage loan was not more than $445,500 and the money you borrowed was spent entirely on the purchase or construction of your home
  • You will be able to resume normal loan repayments when you stop receiving assistance
  • You have exhausted all hardship support options under the National Consumer Credit Code with your lender. Visit these websites for more information:
  • Your financial difficulties were caused by an unavoidable change in circumstances, like temporary unemployment.

Where other people's incomes were used at loan assessment, such as guarantors, you will need to give us current statements of their income.

We will include the income of these people when we decide if you're eligible for mortgage relief.

Who isn’t eligible?

You are not eligible if:

  • You have an interest only loan, a vendor's term contract or loan from a private individual
  • The property is an investment property, not your principal place of residence or you own more than one property
  • Your mortgage loan and other debts secured against your property including the mortgage relief loan, exceed 95 per cent of the property value
  • The property is currently on the market
  • You have no capacity to resume normal mortgage payments as your income loss is long term, such as permanent disability payments
  • You have not yet fully repaid a previous mortgage relief loan
  • If separated, a property settlement agreement has not been finalised
  • You have excessive liabilities, other than your housing loan payments, exceeding 12 per cent of current gross income or outstanding defaults on other debts.

How does the Mortgage Relief Scheme work?

If you are eligible you can get a short-term (up to a maximum of two years) interest-free loan up to a maximum of $15,000.

If the loan is approved you will pay your lender 27 per cent of your gross (taxable) income each month.

We will pay the difference to make up your normal repayment amount.

For example:

  • If your gross income is $1,000 a month: the 27% you would pay your lender is $270 a month.
  • If your mortgage payment is $600 a month: we would pay the $330 difference.

The amount that we pay is fixed when your loan is approved. It will not change in the first 12 months of the loan, even if your income or repayments change.

After 12 months, we will reassess your situation and you may be offered another 12 months assistance if you have not borrowed the maximum amount of $15,000.

What if I am already behind on my mortgage payments?

You may also be eligible for a loan of up to $7,000 to help you pay off existing arrears. This amount is included in the maximum loan amount of $15,000.

If the arrears are more than $7,000, you will need to make separate arrangements with your lender to repay them within the 12-month period.

What happens if I default on my home loan payments while receiving mortgage relief?

The assistance immediately stops and you will have to repay the amount owing on your mortgage relief loan.

How do I apply for the Mortgage Relief Scheme?

Go to Apply for mortgage relief for more information.

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