Need help making mortgage repayments? Here are 3 options
Coronavirus has hit the New Zealand economy hard. Treasury forecasts that unemployment will exceed 13% and major banks are expecting our economy to contract by at least 6% by the end of 2020.
This pandemic and lockdown has been a hard time for heaps of Kiwis, but for those with mortgages and other big fixed costs, it’s been particularly nerve-wracking. If you’ve run into financial hardship and you’re struggling to repay your mortgage there are a few things you can do.
1. Get in touch with Work and Income
In the event that your income is affected by COVID-19, it’s a good idea to get in touch with Work and Income right away. There are a number of schemes targeted to help businesses and individuals who’ve been affected by this pandemic, all of which will make it easier to meet mortgage repayments.
2. Restructure your home loan
If you haven’t lost all your income but things are getting a little tight, making a few small changes to your home loan could make all the difference. A few options you could consider include:
- Extending your loan period.
- Refinancing to lock in a lower interest rate.
- Adding a redraw facility so that you can access funds if your situation worsens.
- Switch to interest-only payments.
To restructure your mortgage, you’ll need help from a qualified and experienced mortgage advisor. If you don’t know anyone, give us a call or an email and we’ll point you in the right direction.
Struggling with your mortgage? Get on the phone to a mortgage broker for help.
3. Take a repayment holiday
When you’ve exhausted all other options, you should consider speaking to your lender about taking a six month mortgage repayment holiday or ‘repayment deferral’. This option shouldn’t be taken lightly as it may cost more in the long run. But if you don’t have any other options, it’ll help make it easier to keep your home. Keep in mind, you’ll still be getting charged interest during the six month holiday period, the term of your loan may increase, and you may end up paying thousands more in interest during the life of the loan.
This might be a hard time for you and many other Kiwis, but we can get through this. We can keep our homes, take care of our families and continue our lives. And if we need a little support along the way, there’s nothing wrong with that!