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Mortgage Arrears

If you are worried about late mortgage payments or are already in mortgage arrears, then there is good news – the law is on your side and your lender will be pleased to help. This section explains the consequences of not making mortgage repayments and should help you understand the potential risks involved. The law stipulates that your lender must consider your situation fairly and take reasonable measures to help you in your financial difficulty. More....


Also, remember, it is in the interests of your lender to resolve any problem you may have. A mortgage is a long-haul agreement between the lender and the borrower, so both share a common interest in finding a solution and rescuing the mortgage. However, it is vitally important to contact your mortgage lender at the first sign of difficulty.

Unable to make mortgage payments

Your lender, based on your payment history, has the following options:

  • Allow you to pay interest only for a determined period
  • Award a ‘payment holiday’
  • Extend your mortgage term; or
  • Reduce payment for short time.

If you are already in arrears, speak to your lender about arranging a way in which you can pay what is owed. The lender may:

  • Increase your monthly payments
  • Add the sum of the arrears onto your mortgage; or
  • Allow you to pay what you can each month.

Consequences of defaulting on your mortgage

As a ‘priority debt’ you risk losing your home. The lender is entitled to repossess your property if you do not make payments on your mortgage. In the event your house is repossessed and sold for less than you owe on the mortgage, the lender will demand you make up the ‘mortgage shortfall’.

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