Struggling with mortgage repayments: options before you fall behind

If keeping up with your mortgage repayments has become genuinely difficult, the most useful thing you can do is act before you miss a payment, not after. This is general information, not personal financial advice, and every lender’s process is a little different, so treat this as a starting point for a conversation with your own lender or a qualified adviser.

Why contacting your lender early matters

Financial pressure can build gradually, from a change in interest rates, reduced work hours, an unexpected expense, or a relationship change, and it’s easy to keep hoping things will improve before reaching out. Waiting rarely makes the conversation easier, and a lender’s hardship team generally has more options available the earlier you get in touch, before repayments have actually been missed.

Lenders are required under Australian law to have a hardship process for borrowers experiencing genuine financial difficulty. Reaching out before you fall behind puts you in a stronger position than doing so after missed payments have already affected your credit file. Lenders generally prefer working out an arrangement over a borrower defaulting, so this conversation is more collaborative than people often expect going in.

Options a lender may offer

• A temporary repayment reduction or pause, usually for a set period tied to a specific circumstance like job loss, illness, or a temporary income drop.
• Extending the loan term, which lowers ongoing repayments by spreading the balance over a longer period.
• Switching to interest-only temporarily, reducing repayments while you work through a short-term issue.
• A formal hardship variation, a documented agreement covering how your situation will be managed for an agreed period.

Where refinancing does and doesn’t fit

If the underlying issue is that your interest rate is no longer competitive rather than a temporary change in circumstances, refinancing to a lower rate can genuinely help going forward. It isn’t a quick fix though: approval takes time, and it generally isn’t the right tool if you’re at risk of missing a payment in the immediate term. Talk to your current lender about hardship support first if the situation is urgent, and consider refinancing as a separate step once things have stabilised.

Free and independent support

Resource	What it offers
Your lender’s hardship team	Options specific to your loan and circumstances
National Debt Helpline	Free, confidential financial counselling
A mortgage broker	Can help assess whether refinancing or restructuring makes sense once your situation stabilises
A financial counsellor	Independent guidance on your broader financial position, not tied to any lender

When it’s worth involving a broker

Once a hardship arrangement is in place and your situation has stabilised, it’s often worth reviewing whether your loan itself is still the right fit. A broker can look at whether refinancing, consolidating other debts into the mortgage, or restructuring the loan would put you in a stronger position going forward. This especially matters if you’re juggling repayments across more than one property; our guide on getting investment property finance ready covers how lenders assess that combined position. This is a step for after the immediate pressure has eased, not a substitute for talking to your lender if you’re at risk of missing a payment now. Browse Perth mortgage brokers if you reach that stage, and see our scoring methodology for how listings on this directory are ranked.

What tends to make things worse

Avoiding contact with your lender is the most common mistake, usually out of an understandable but counterproductive instinct to avoid an uncomfortable conversation. Missed payments without any communication tend to escalate faster and affect your credit file more than a proactively arranged hardship variation would. If you’re unsure where to start, the National Debt Helpline is a genuine, free entry point that can point you toward the right option for your situation.

This is general information about options that are commonly available, not a guarantee of what applies to you. Your lender’s specific hardship process and eligibility criteria will determine what’s actually on offer, so contact them directly as soon as you sense a problem developing, rather than waiting until repayments are already missed.