Mar 5, 2021 12:05:00 PM

Getting Help When You Can’t Pay Your Mortgage

Topics: Selling, Mortgage Advisers, COVID-19 0

COVID-19 hit many New Zealand families hard, with reduced hours and job losses that left homeowners struggling to repay the mortgage. While most banks offered an initial 3-month and then a further 6-month mortgage deferral in 2020, most deferrals end on 31 March 2021 and homeowners are expected to restart mortgage repayments. If you’re experiencing financial stress or difficulties, here are some ways you may be able to get help.


Apply for financial hardship assistance

Most lenders are aware of the ongoing financial challenges as a result of COVID-19, and offer a formal process of applying for financial hardship assistance. Financial hardship assistance varies depending on your circumstances but could include options to:

  • Reduce loan repayments: You may be able to reduce your mortgage payments to the minimum required if your repayments are currently set higher than the minimum required. 
  • Restructure repayments: You may be able to extend your home loan term, which will reduce your regular home loan repayments. This will increase the amount of interest you pay over the life of the loan 
  • Alter loan repayments to an interest-only loan: During this time, your home loan balance will remain the same as you'll just be paying the interest on your home loan. 
  • Home loan repayment deferral: Short-term relief – usually up to six months – of no repayments. But during that time your interest will continue to accrue. At the end of your repayment deferral, your repayments will usually be adjusted so that you still pay your home loan off over the original loan term. 
  • Waive certain fees and charges or waive penalties for early withdrawal of a term deposit.

You may be asked to provide supporting information around your income and expenses, or any medical conditions which may have impacted your ability to work and make repayments on your home loan. Be honest about your situation so that your lender can determine if and how they can help.

Keep in mind each option described above has certain advantages and disadvantages and your Mortgage Express adviser will be able to help you decide which option may suit you.

There are also a few other options you may want to consider before going down this route: 

  • Claim from insurance if you have cover for redundancy or job loss. This may help you with short term financial relief.
  • Apply to withdraw your KiwiSaver early due to financial hardship. To withdraw funds early you will need to provide evidence to show you are suffering significant financial hardship. If your application is accepted you can only withdraw your and your employer’s contributions.

Assess your personal circumstances

Keeping close track of your income and expenses may provide some answers for how to cut down on costs and what your priorities are. Take a close look at your income and expenses: are there items you could cut out altogether or reduce for a short time because they’re not essential?

For free budgeting advice, visit the FinCap website.

If you know you’re going to struggle to start your mortgage repayments once again, it’s important you seek help right away. Missed mortgage repayments are serious and could result in you losing your home in a mortgagee sale.

Mortgage Express advisers can help with lending advice tailored to your unique situation. Get in touch with one of the Mortgage Express team of advisers to find out more.


While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.

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