In light of the current unprecedented global events as a result of COVID-19, we wanted to ensure you that we are here to support you for the long haul. It is becoming increasingly evident this is going to be a marathon, not a sprint and that we need to prepare for increasing unemployment, and reduced incomes. With this in mind, many of you may struggle to make your home loan repayments so we wanted to explore the options available to you.
If you have recently lost your job or found your income substantially reduced you may be able to defer your home loan repayments for 3-6 months. All lenders have a hardship department that can assist with this process. A link of their contact details can be found here. We are aware that bank call centres are struggling to keep up with call volumes, and in many cases banks have now started to forward us forms for you to complete and lodge. Please call us first to see if we can assist.
If your income hasn’t been affected yet, and you are unable to access deferrals through hardship but you still want to minimise your cashflow expenditure by reducing your repayments there are other options available to you.
If you have been paying over and above your minimum monthly home loan repayments you may have funds available in either redraw, or sitting in your offset account. If you reduce your loan repayments to the minimum amount you can then use these funds to make your future loan repayments.
With the recent RBA rate reductions many of the banks have dropped their interest rates, with some 1, 2 and 3 year rates in the low 2’s. For most people this is around 1% lower than they are currently paying. Locking in to one of these low rates, could reduce your monthly repayments by hundreds of dollars. Note: there are other factors to consider before fixing, such as break costs, so please ensure you call us first before proceeding with this option.
Legislation passed this week enables individuals to access up to $10,000 before 1 July 2020, and then $10,000 after July 2020 if their income has ceased or fallen by 20%. This is done via the ATO myGov website and will be available from mid-April 2020. More information regarding eligibility and the process can be found here.
PAYG withholding variation
If you have had your work hours reduced but you are not technically unemployed (so unable to access jobseeker payments) you can apply to the ATO to have the tax withheld from you pay for the rest of the year so you don’t have to wait to get a refund when you lodge your tax. More information regarding this can be found here.
Finally, know that you are not alone and you do have options. We are only a phone call or email away and happy to answer your queries. You need a broker now more than ever!