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We understand that borrowers may experience financial hardship from time-to-time, whether it’s due to the recent severe weather conditions, the pandemic, or other extenuating circumstances.
Should I apply for financial hardship assistance?Financial hardship assistance can be an effective means to get through a short-term period of financial difficulty.
However, is it very important to be aware of the longer-term impacts. For example, if you are eligible for a repayment break, interest will continue to accrue on your loan meaning that your principal mortgage balance will increase. At the end of the period your loan repayments will be recalculated on the new loan balance over the remaining term, meaning your regular repayments will increase. So it is important to consider your long-term plans if considering this option.
As another example, if you temporarily switch to Interest Only repayments, your loan balance won’t change during the Interest Only period. However, as you have a shorter period to repay the balance of your loan your Principal and Interest payments will increase at the end of the Interest Only term.
It is very important to ensure you understand the longer-term impacts of financial assistance before proceeding.