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Can you defer a mortgage repayment?

Many financial institutions have offered their customers the option to defer their home loan repayments, if they’ve been impacted by COVID-19. But what is the impact of deferring my home loan repayments? Should I consider deferring my home loan repayments? What are the pros and cons of deferring my home loan repayments?

Deferring your home loan repayments means requesting your lender to defer your repayments during a specified time period. For customers who have lost their job or suffered a loss of income as a result of the COVID-19 situation, do not stop making your repayments, you must apply and be approved for deferred repayments. If you stop making repayments without a deferred repayments approval, it will be considered a default.

 To find out more about our home loan options and to apply to defer your home loan repayments, please visit our COVID-19: home loans page

Why would you defer your home loan repayments?

If the impact of COVID-19 means you’ve lost your job or your income has been reduced, then deferring your repayments may be an option for you.

Before you consider deferring, you should understand the pros and cons.



  • Free up your cash flow with no repayments for the deferral period.
  • No defaults on your loan




  • Interest continues to accrue during the deferral period and will be capitalised into your loan (increasing your loan balance).
  • After the deferral period your repayments will be higher as the repayments and interest will need to be paid off during the remainder of your loan term.
  • You will pay more interest over the term of your loan.

How much would the additional interest be?

How much additional interest you pay will be determined by a number of factors including how much you owe, the deferral period, the remaining term on your loan, your interest rate and the repayments you make. Interest charges are applied during the deferred period, and interest is capitalised, which means that your loan balance will increase.


Taking up a deferment on your home loan repayments is up to you and your situation. However, understanding the pros and cons may help you make a decision that is right for you.

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Things you should know

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.

© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.