Mortgage relief

If you're having trouble paying your home loan, the Mortgage Relief Scheme could help you keep your home.

If you're eligible, you could get a short-term interest-free loan to help you keep up your home loan repayments after an unavoidable drop in your income.  This could be caused by short-term unemployment, sickness or some other crisis.

If you get Mortgage Relief, you will pay your lender a set amount of 27 per cent of your gross income each month. We'll pay the difference between this amount and your normal repayment amount. 

For example, if your gross income is $1,000 per month and your mortgage payment is $600 per month, you would pay your lender $270 a month and we would pay the remaining $330.

The amount that we pay is fixed at the time your Mortgage Relief loan is approved.  It won't change during the first twelve months of the loan, even if your income or repayments change.

Other assistance you can get

We may also give you a loan of up to $7,000 to help you pay off existing arrears. If you have arrears of more than $7,000, you will need to make separate arrangements with your lender to repay them within the 12-month period.

After 12 months, we'll reassess your situation. You may be offered a further 12 months assistance.  You can get up to two years of help and a maximum of $15,000, including arrears assistance.

Payments

We'll let your lender know when you can start making reduced repayments of 27 per cent of your gross income.

Assistance continues until either your circumstances improve so that you can afford to repay your housing loan again, or the agreed assistance period expires.

Security

To secure your Mortgage Relief loan, we will register a mortgage on the title to your property.  This requires the consent of whoever is listed on your existing mortgage.

You'll be liable for the costs of arranging the Mortgage Relief loan, like bank fees and valuation fees. These costs can be added to your loan. Our mortgage is taken off your property when you have fully repaid the loan.

Repaying the Mortgage Relief loan

When your assistance runs out, you need to start meeting your normal mortgage repayments again and to start repaying your Mortgage Relief loan.

You can make payments on your Mortgage Relief loan either in a lump sum or by monthly instalments.

If you sell your house, re-finance your mortgage, or get additional mortgages, the Mortgage Relief loan must be paid back straight away in a lump sum.

Eligibility

You're eligible if:

• your home loan repayments are more than 27 per cent of your gross income
• your original mortgage loan was not more than $349,200 and the money you borrowed was spent entirely on the original purchase or construction of the property
• you will be able to resume normal loan repayments when you stop receiving assistance
• your financial difficulties were caused by an unavoidable change in circumstances. (Please Note: We don't usually assist with second or subsequent mortgage loans unless they were housing related.)

If you have been on a low income for a long time, such as if you are a permanently incapacitated worker, you must be able to show that your financial situation will improve in the short term (for example, through a compensation payment).

Where other people's incomes are used to pay the loan (such as guarantors, covenantors or children), you'll need to provide current statements of their income. We will include these when we decide if you're eligible for Mortgage Relief.

You're not eligible if:

• you have a loan under a vendor's term contract or from a private individual
• you have an interest only loan
• you have a loan secured by company share
• the property is an investment property
• the property is not your principal place of residence
• your mortgage loan and the Mortgage Relief loan will equal more than 95 per cent of the property valuation
• the property is currently on the market
• you have not yet fully repaid a previous Mortgage Relief loan
• a property settlement agreement has not been finalised

You can not get Mortgage Relief if you have excessive liabilities or outstanding defaults on other debts.

Applying for Mortgage Relief

Complete the Mortgage Relief application form (PDF size 152KB, Pages 8) and send it to:

Loan Assistance
GPO Box 4057
Melbourne, Victoria   3001

For more information or an application form, call Loan Assistance on 1800 134 872 (free call).