Job Keeper: Home Loan Holidays and Mortgage Stress
Having mortgage stress about your mortgage payments? Don’t worry, we’ve got your back. As your trusted mortgage broker, we’re here to help you navigate this uncertain time. With over 485,000 mortgage repayments deferred due to COVID-19 (according to the ABA), you’re definitely not alone.

Is the cliff coming?

It sounds like everyone’s been talking about the “impending cliff” that’s on its way, which may cause mortgage stress. A lot of people have taken a break from their mortgage repayments. But APRA has extended those breaks until the end of March 2021 to provide some relief. Additionally, while the government had originally promised JobKeeper and JobSeeker until September, they have now established a clearer plan for the future. Which can help alleviate financial concerns. So, it looks like there’s a little more breathing room to prepare for what’s to come.


A more gradual reduction in support

So, here’s the deal with the JobKeeper and JobSeeker programs during times of mortgage stress. Early in the COVID-19 crisis, the government introduced them as a huge relief for many businesses and workers. But, as the crisis continues to evolve, so do the programs.

Eligible businesses can continue to access the JobKeeper payment until March 28. But the government is reducing the payment in two steps. Starting at the end of September, full-time employees will see their payments drop from $1,500 a fortnight to $1,200. Then to $1,000 a fortnight starting January 3. Part-time workers will see their payments halved from $1,500 to $750 a fortnight at the end of September. And then drop to $650 a fortnight starting January 3. This reduction could potentially cause mortgage stress for those who have been relying on the full payment.

Keep in mind, the transition to the new payment amount isn’t automatic. Businesses and employees will need to reapply and meet certain eligibility requirements. Including demonstrating a reduction in turnover that may have caused mortgage stress.

The government is reducing the coronavirus supplement paid each fortnight for the JobSeeker program. From $550 to $250, which could add to mortgage stress. But, to make up for this reduction, the government is allowing those on JobSeeker to earn $300 a fortnight. Up from the current $106. The goal is to encourage people to get back to work without worrying about losing their financial support. Just remember, starting August, you’ll need to actively be searching for work to stay on the program.

How will you feel after a mortgage holiday?

If you’re experiencing mortgage stress and have taken advantage of your lender’s offer of a mortgage repayment pause, it’s important to know that there are long-term consequences. The missed interest will be added to your loan, which means your repayments will be higher after the pause. Additionally, your balance may be subject to additional fees based on the size of your loan.

How can you avoid mortgage stress?

The world is really shifting these days, isn’t it? With changes in the economy, society, health, employment, and government support, it’s no wonder that things are feeling pretty uncertain. But, if you’re someone who’s receiving government support, like the JobKeeper payment, that can at least help you plan for the next few months. And, if you’re experiencing mortgage stress, now’s the time to get ahead of the curve and talk to your lender.

To secure your financial stability and manage mortgage stress, it’s important to understand more than just how the government is providing support. You might be wondering if now’s the time to switch to an interest-only loan, fix your loan with interest rates at a historic low, split your loan, or look for a more suitable loan that could save you money. And, if you haven’t had an income loss during this time, you might even be considering investing in the property market.

As your mortgage broker, we’re here to help you navigate all of these options and make sure you’re prepared for what comes next, including any potential mortgage stress. Whether you’re considering refinancing or discussing a better rate with your lender, we have the expertise to help you make the best decision for your individual circumstances. Don’t hesitate to reach out for assistance, as we’re here to provide the guidance and support you need.

It’s important to keep in mind that individual circumstances can vary, so seeking advice from a financial professional is always wise when it comes to dealing with mortgage stress. Before making any decisions, assess how the advice fits with your individual circumstances. If you’re feeling overwhelmed, we’re here to help! Contact us to find the right mortgage solution for you. Note that the information is accurate as of the date of publication, but changes may occur in the future.

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