Repayment options when separating from a partner

When going through divorce and separation it’s natural to start thinking about the changes this will bring. Often it means handling changing financial commitments, including costs to separate financially whilst paying off a home loan. We are here to help.

 

Flexible options to help lower your repayments during your divorce and separation

The costs incurred can make it difficult for some families to meet their full home loan repayments. There are a number of flexible options to temporarily help ease the financial pressure during this period - allowing you to focus on your financial independence. Use our repayment calculator, visit us in branch or speak to a lender or call us on 132 558 to see if the solutions listed here are right for you.

Option 1 – Mortgage Repayment Pause

Mortgage Repayment Pause is permitted if you have made extra payments towards your loan.

 

You could be eligible for this if:

 

• You have a variable rate home loan.
• Your repayment type is principal and interest.
• You’re ahead on your scheduled repayments. Don’t know if you are? Call us on 132 558 to find out.

 

You should check whether the available funds will cover the payments you wish to miss or reduce. A formal approval process does not apply. Loans are to be Fully Drawn and have more than the scheduled repayments as available funds.

 

It’s important to weigh up the following factors when requesting Mortgage Repayment Pause:

 

• You will continue to accrue interest while your repayments are paused.
• The length of your pause is determined by the amounts of extra funds you have in your loan.

Option 2 – Reduced repayments

Mortgage repayment reduction allows you to reduce your home loan repayments by 50% for up to 6 months.

 

You could be eligible for this if:

 

• You have a variable rate home loan.
• Your repayment type is principal and interest.
• You’ve had your loan for more than 12 months.
• Your loan isn’t subject to Lenders Mortgage Insurance.
• You’re able to pay at least 50% of the minimum repayment amount during your reduced repayment period.
• Your projected limit does not exceed the maximum approved limit. Don’t know if it does? Call us on 132 558 to find out.
• You haven’t missed more than 2 repayments over the last 12 months.

 

A formal approval process is required to access your eligibility for this option. Speak to your local Westpac banker or call 132 558 to find out more.

Option 3 – Switching to Interest Only (IO)

You may be eligible to switch your loan to interest only, this means that you will only pay the interest component of your repayments during the approved IO term.

 

You could be eligible if:

 

• You have a variable rate home loan.
• Your repayment type is principal and interest.
• You’ve had your loan for more than 12 months.
• You haven’t exceeded the maximum interest only term allowable for your product.

 

A formal approval process is required to access your eligibility for this option. Speak to your local Westpac banker or call 132 558 to find out more.

 

It’s important to weigh up the following factors when requesting to pay interest only:

 

• Interest rates for loans with interest only repayments are higher – it’s important to be aware that the interest rate will be higher if you pay interest only instead of principal and interest.
• Increased repayments at the end of the interest only period – because the amount you’ve borrowed will need to be paid back in a shorter timeframe, the repayments will be higher than if you’d opted to continue paying principal and interest. The longer the interest only period, the higher the jump in repayments will be.
• You’ll pay more interest over the life of the loan – that’s because there won’t be any reduction in the amount you’ve borrowed during the interest only period.