We're here to help When life throws a curve ball your way, know that we've got your back. Talk to us Phone us Email us Breadcrumbs Teachers Mutual Bank Contact Financial hardship Repayment pause FAQs Repayment pause Find answers to frequently asked questions around repayment pause. Financial hardship Managing credit card debt Financial hardship FAQs Repayment pause FAQs Financial hardship Managing credit card debt Financial hardship FAQs Repayment pause FAQs Options to help you Just as we've done over the past 50 years, we will continue to be there for teachers, their families, and those involved in the education community. We’re offering a range of options to help you such as a repayment pause on your home loan. You may be able to pause your home loan repayments for a three month period. During the pause period, interest will continue to be added to your home loan. This will give you the time to prepare a plan to get back on track with managing your finances. Please note: Your mortgage account must not be in arrears and repayment pause can only be provided based on the following scenarios: Affected by Global pandemics; Natural disasters; Maternity/Paternity; Adoption; or Carers leave Get in touch Every Member’s situation is unique, that’s why we encourage you to talk to us so we can work together towards the repayment of your home loan. Call us on 13 12 21, press 3 then option 3 or email us at [email protected]. Frequently Asked Questions 1. What is a repayment pause? A repayment pause is there to give you time to get your finances in order. During the period of the repayment pause you are not required to make any repayments. You may be able to pause your home loan repayments for a three month period. 2. What happens to the interest on my home loan during a repayment pause? While you are in a repayment pause, you will not be required to make any repayments to your home loan, i.e. Principal and Interest or Interest only repayments. This means the balance of your loan will increase based on your missed repayments and accrued interest. We would expect you will make up any repayments not made during the repayment pause period over the remaining term of your loan, or extend the term of your loan depending on your financial circumstances. Example Janice’s home loan balance is $241,841. She has a remaining home loan term of 25 years and 3 months. Her interest rate is 3.55% p.a and her weekly repayments are $277.41. Due to financial difficulties Janice requests a repayment pause for three months. The repayment pause is granted and Janice makes no repayments on her home loan for three months. During this time interest continues to accrue on her home loan and gets charged to her home loan account each month. At the end of the three months, Janice’s home loan balance has increased to $243,987 due to interest being charged and no repayments being made. After three months, the remaining term of the home loan is 25 years and Janice is in a financial position to recommence home loan repayments. She has two options: Continue to pay the home loan off over the remaining term by increasing her repayments to $281.98pw, and paying a total of $124,881 in interest over the life of the home loan; or Keeping the same repayments of $277.41pw and extending the home loan term by eight months, and paying a total of $129,080 in interest over the life of the home loan. From the example above, if Janice chooses to keep the same repayments and extend the term of the home loan she will pay an additional $4,199 in interest over the life of the home loan due to the repayment pause. 3. What are the long-term impacts of deferring repayments on my home loan? A repayment pause gives you time to take the steps to get back on track, but it’s important to note you will end up paying more interest over the life of the home loan. This is because the interest will continue to accrue and will be added to your outstanding balance. We encourage you to talk to us if you have any questions or want to discuss the long-term impacts of a repayment pause. 4. What is Lenders Mortgage Insurance? Lenders Mortgage Insurance gives Members the opportunity to purchase a property without a 20% deposit. It makes it possible for us to support your purchase, while protecting us from a loss if your property has to be sold and is sold for less than the amount owing on the home loan. 5. Who does Lenders Mortgage Insurance protect? Lenders Mortgage Insurance protects us from a loss. If there is an amount outstanding after the sale of the property, we may make a claim under the Lenders Mortgage Insurance. Helia Financial Mortgage Insurance Pty Limited (Helia) is the provider or underwriter of Lenders Mortgage Insurance. If Helia pay our claim, Helia may choose to recover the amount of the claim and any other costs directly from you. It is important to note that Lenders Mortgage Insurance does not protect you or any guarantor. It should not be confused with Mortgage Protection Insurance which is a separate insurance policy that protects you if you are unable to make repayments on your loan. Therefore, Lenders Mortgage Insurance does not stop you from being liable for any shortfall that may arise if the sale of your property does not fully repay your debt to us. 6. Does a home loan repayment pause affect my credit report? If your home loan is up to date at the time you request a pause on your home loan repayments, your credit score will not be negatively impacted by the repayment pause. If your home loan is in arrears at the time of your request, we may need to treat you under our Financial Hardship program. Refer to our Financial Hardship FAQs for more information on financial hardship, credit scores and credit reports. 7. Can I still make partial repayments during my repayment pause? Yes, you can still make one-off or partial repayments while your home loan is on a repayment pause. As interest continues to be charged to your home loan during the repayment pause period, partial payments will help reduce the amount of interest accrued. We encourage you to make repayments in any amount you can afford during the repayment pause period. 8. Can I cancel my repayment pause? Yes. If your circumstances have changed and you would like to cancel your repayment pause early, you can email us at any time to [email protected] or phone us on 13 12 21. Press 3 then option 3. 9. What happens to my home loan balance when the repayment pause period ends? Your home loan balance will increase and your repayment amount may need to change due to your repayments being paused. This will ensure you pay off your home loan within its contracted term. We encourage you to talk to us if you have any questions or want to discuss the long-term impacts of a repayment pause. Please get in touch so we can explore every possible option to help you get back on track. Get in touch 10. What happens once my repayment pause period ends? If you can, it is our expectation that you will recommence making your contractual repayments. As everyone’s financial situation is different, we have a number of options to support you: Recommence principal & interest loan repayments - your repayments will increase within your agreed loan term to make up for any missed payments during your repayment pause period. Request reduced principal & interest loan repayments and extend the term of your loan. If you have demonstrated that you can make some repayments on your home loan on a principal and interest basis, we can discuss this option with you. Request Interest only repayments. If you’re unable to recommence making your contractual repayments, but are at a minimum able to make interest only repayments for a limited period, we can discuss this option with you. Subject to Bank approval and loan qualifying conditions based on your individual circumstances. Financial Hardship - if you are still facing difficulties and are unable to make any repayments at all, you can apply to us for financial assistance under our Financial Hardship program. If you determine that your financial position is unlikely to improve, you may be better off selling your property, or living somewhere else and renting out your property until you can afford the repayments again. Selling your property is a big step, so we recommend that you seek financial counselling or independent legal advice about this. You can contact a financial counsellor or the National Debt Helpline on 1800 007 007 to discuss your current financial situation. Every Member’s situation is unique, that’s why we encourage you to talk to us so we can work together to explore all your options. 11. How does interest only repayments work? With interest only repayments, you only pay the interest charged on the amount you have borrowed on your home loan. This means your repayments are only servicing the interest component of your home loan. Example If you have a home loan of $370,000 with a remaining term 25 years at a variable interest rate of 3.10% p.a, and you decide to make interest only repayments for one year, the total interest payable over the life of the home loan would be $166,478. If you remained on principal and interest repayments the total interest payable over the life of the home loan would be $162,166. By choosing to make interest only payments for one year the total extra interest cost is $4,312. 12. After my repayment pause finishes, will my credit report be affected if I can’t recommence my home loan repayments? Yes, your credit report will reflect any missed repayments that you have not paid on your home loan after your repayment pause period ends. However, if your account is approved for the Financial Hardship program, we will instead report that a financial hardship arrangement is in place on your credit report. Refer to our Financial Hardship FAQs for more information on financial hardship, credit scores and credit reports. 13. Where can I get additional help if I need it? The effects of financial difficulty can really take its toll. If you’re struggling with your mental health, please get in touch with one of the organisations below. One conversation can make a big difference. The Australian Department of Health offers a range of online mental health support services. Please visit their website for more information. For personal crisis and mental health support services contact: Lifeline on 13 11 14 or Beyond Blue on 1800 512 348 at any time. If you are experiencing domestic violence, please contact: 1800 RESPECT (1800 737 732). You can also contact MensLine Australia on 1300 789 978 and the Men's Referral Service on 1300 766 491. 14. How to contact us? Every Member is unique, and so are their financial difficulties. We want to do whatever we can to help you through this time. Please get in contact with us on 13 12 21, press 3 then option 3 or or email us at [email protected].
