It means you don't have to make any home loan repayments during the six-month deferral period.
It's important to note that, by deferring your repayments, the interest will be 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.
As an example, if you borrowed $300,000 with 20 years remaining at 3.5%, 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're currently paying, we'll extend your loan term as required.
Taking advantage of this repayment deferral will not impact your credit rating or appear on your credit file during the deferral period.
You can continue to make repayments - however, the interest deferral is locked in for six months. Any extra repayments will appear as surplus in your loan account and will reduce the balance you pay interest on over the six months.
Alternatively, if life is getting back on track and you’re able to start making your home loan repayments again, you might want to consider withdrawing your deferral and restarting your repayments. Restarting your repayments before the end of your deferral period will help reduce the amount of interest you’ll pay over the life of your loan. For more information about how to do this – and how it could save you money in the long term - please refer to the FAQ below - ‘Can I withdraw my deferral and restart my repayments?'