I have a home loan repayment deferral – what does that mean for me?
It means you don’t have to make any home loan repayments during the deferral period.
It’s important to note that, by deferring your repayments, the interest is capitalised. This means that the interest you’d have normally paid during the deferral period continues to accrue and is added to your outstanding home loan balance, to be paid after the deferred period. In turn, it means your outstanding balance will increase, and you’ll pay more interest over the life of the loan.
For example, if you borrowed $300,000 with 20 years remaining at 3.5% and you deferred your repayments for six months, you would pay an additional $8,674 in interest and have your loan extended by 13 months. The actual cost to you will depend on your own individual circumstances.
After the deferral period, to help keep your repayments as similar as possible to what you were previously paying, we’ll extend your loan term as required. Note that if your home loan deferral period is extended, your loan term won’t be extended further – this may result in a higher monthly repayment amount than what was paid before the deferral.
Taking advantage of a repayment deferral won’t impact your credit rating or appear on your credit file during the deferral period.