Banks extend mortgage holiday but conditions apply

Australia’s banks will let some borrowers extend their repayment pause by another four months, subject to conditions.

In March, banks announced borrowers could pause their repayments for up to six months, ending in September.

Now, banks have said some borrowers can extend that period by four months, ending in January 2021 – but this extension “will not be automatic”, according to the Australian Banking Association (ABA)

If you’re able to resume making repayments after the six-month deferral, you’ll be expected to do so.

If you can’t, your lender might talk to you about restructuring your loan, such as extending the loan term or switching to interest-only payments.

If nothing has been agreed by the end of the six-month deferral, your lender might extend it by four months – but you will be expected to work with your lender during that grace period to find a long-term solution.