Ece Demir - 15 Jul, 2020

How to unfreeze your mortgage repayments

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Lenders have deferred home loan mortgage repayments of well over 400,000 borrowers in response to the COVID-19 pandemic, which according to the Australian Banking Association equates to one in 14 of all home loans.

Individuals have been fearful of how long the pandemic could last and anticipated a three to six-month pause on their loan repayments. While some of these deferrals were providing genuine relief for many families, most deferrals were not considered necessary.

Did you want to resume your repayments sooner than expected? Here are some options for you.

Related: Repayments deferred but not forgotten: the truth about mortgage holidays

How can I resume my mortgage repayments?

Most lenders have offered their customers a three-month deferral pause on their loan repayments with the potential to extend for a further three months.

The process to resume your repayments is not as difficult as you may think.

Most lenders will have a three-month check-up period, where they will contact you if you need to extend your deferral period or not. If you are coming up to the three-month point, be sure to let them know you want to resume your repayments.

You may also want to confirm how you’ll be repaying the deferred repayments and the capitalised interest.

You might also like: Whats happening to homeowners who froze mortgage repayments?

Multitasking mum juggling young child while managing her mortgage

Can I switch from a repayment holiday to a refinance?

The Australian Prudential Regulation Authority has advised that repayment holidays taken due to COVID-19 would not count as “mortgage in arrears” and would not be recorded on your credit file, provided the customer has made their previous repayments before the pandemic.

This provides good news for customers to consider refinancing however some lenders will still require a background check of six months with all the repayments made on time before they could consider an application.

It is yet to been seen if lenders will adjust their refinancing policies due to the COVID-19 virus. It would prove to be a more reasonable approach if lenders considered the customers repayment history prior to taking a repayment holiday.

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St.George Bank
Commonwealth Bank
Macquarie Bank

How are lenders offering help?

Unemployment figures continue to rise, with the number of people without work increasing from 85,700 to 927,600 people, the Unemployment rate increased 0.7 pts to 7.1%, as lenders are working towards solutions and going through a case-by-case basis to determine if customers will need a longer deferral period.

The Connective executive director Mark Haron explains in an interview with Broker News, “while there’s been a bit of a reprieve in that people have access to government funding and they’re able to pause their repayments, we are moving towards the end of the six-month repayment pause period still having a lot of people not in a financial position to make those repayments”.

He explained that given the grave figures around COVID-19 job loss and the long-term implications they carry; he expects to see further support offered to home loan customers through an extension of the loan repayment pause or even possibly introduce another measure.

You might also like: Moving to a digital world post-COVID

“We’re seeing a really responsible approach from the lenders to date, so if there are still going to be 700,000 to one million people that don’t have income in September and October, the lenders are not going to be in a hurry to do foreclosures on any of those people,” Haron said.

Now that restrictions are easing, most lenders are increasingly trying to check in with customers to ensure people aren’t taking a deferral period if they don’t need too.

A deferral extension of up to four months will not be automatic, it will be provided to those who genuinely need some extra time.  Many customers may need less than four months to either restructure their loan or get back into full repayments.

Lenders will work with customers to find the best options to restructure or vary their home loan. 

Options may include:

  • Extending the length of the home loan
  • Converting to interest only repayments for a period of time
  • Consolidating debt
  • A combination of these and other measures

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Commonwealth Bank is no longer automatically offering mortgage deferrals; however, they will present assistance on a case by case basis. 

The assistance period will be of up to six months.

During the deferral period no repayments will be required however, interest and charges will be added to the loan balance.

Once the support period is over or if the customer wishes to resume repayments, the loan balance will be recalculated, and loan term extended so that the usual monthly repayment can be kept the same.


ANZ is allowing a six-month hold on repayments, with a three month check in halfway.

During this time interest will be capitalised and added to the outstanding loan balance.

ANZ also reminds customers to consider all the options available to them, such as accessing their redraw balances or withdrawing funds held in offset accounts.

Customers who are paying more than the minimum repayment amount will also have the option to reduce the size of their repayments via internet banking or by calling ANZ.

A third of ANZ customers who deferred loan repayments have not re-started their repayments, according to an interview with Rate City and ANZ group executive of Australia retail and commercial, Mark Hand.

You might also like: How to help your go-to businesses and services survive the COVID-19 shutdown

ANZ bank ATM

You might also like: ABA Confirms COVID-19 Repayment Holidays Wont Impact Credit History


Westpac is offering customers who have lost their jobs or experienced a loss of income due to COVID-19 a three-month deferral on their home loans, with a three-month extension available after review.

Interest that goes unpaid will be added to your outstanding loan balance, meaning your repayments will increase once the assistance period ends.


As part of their Covid-19 support package, NAB will be allowing eligible customers a six-month pause on their home loan repayments, with a three-month checkpoint for review.

During this period, redraw access will not be available, and customers will need to make up for missed repayments over an agreed time period.

NAB has said it’s checking in with customers who are on the pause to see if they still need it.

Example Page

Macquarie Bank

Macquarie Bank is offering customers a six-month pause on their home loans, with a three-month check-up.

During this period, the redraw funds on your loan account will reduce as its used towards any repayments that fall due to the pause period.

Interest will be capitalised and higher repayments after the deferral period, to cover missed repayments as well as interest and fees.


Bankwest is offering eligible customers up to six-months for a deferral period on their mortgage repayments.

The home loan repayments will start again after the six-month deferral period, and the repayments will be adjusted accordingly.

Bankwest will extend the loan term by the months required to make sure repayments will remain similar to the current monthly price.


A deferral period of three month will be available with a “financial assessment” at the end of that period, a further three months could be available.

The pause will impact access to funds in a redraw account, according to the bank: “If you have funds available in redraw, we will hold up to three months’ worth of minimum repayments from the date we activate or extend the payment pause and you cannot access these ‘held’ funds until after the payment pause period.”

ING states that your loan balance will be higher when repayments resume and the minimum repayments will increase slightly so that the loan can be paid within the loan term, however if you wish for the loan term to be extended that is also an option.

Related: How the big banks move to minimum repayments could be detrimental

St. George

St. George is offering customers who have lost their jobs or experienced a loss of income due to COVID-19 a three-month deferral on their home loans, with a three-month extension available after review.

Loan repayments will be higher after your deferral period.

The deferred interest will be capitalised, and any deferred principal repayments will need to be repaid off during the remainder of your loan term.

Words by Ece Demir


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