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Published May 30, 2024
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Can I Use A Mortgage Holiday To Put My Payments On Hold?

A mortgage is often a 20- to 30-year commitment for homeowners. If you face difficulty meeting your repayments, consider a mortgage repayment holiday, which allows you to pause your repayments for a set period.

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Changing interest rates, work circumstances and unforeseen expenses can sometimes make keeping up your mortgage commitments challenging. In these circumstances, it may be possible to put your payments on hold, which is also known as a mortgage repayment holiday. 

What is a mortgage repayment holiday?  

A mortgage repayment holiday occurs when you pause your mortgage repayments, usually for one to 12 months. 

A standard mortgage repayment holiday occurs when your repayments are placed on hold for an agreed-upon time, during which you will not pay anything to your lender. This respite should give you time to get your finances back on track before resuming your repayments. 

However, your interest may capitalise during this period, meaning you will ultimately pay more over the remainder of the mortgage. 

» MORE: How to pay off your mortgage faster

🤓 Nerdy Tip

If your income has been affected by injury or sickness, it may be necessary to delay your repayments until you can resume work. However, if your financial situation has taken a more permanent hit, you may need to consider whether you will be in a better position in a few months. 

Who can take a mortgage repayment holiday?

You may be eligible for a mortgage repayment holiday if you: 

  • qualify for financial hardship
  • have experienced a short-term injury or had a medical procedure 
  • are on maternity leave
  • have been affected by other special circumstances, such as natural disasters. 

Each lender will assess your eligibility based on their own criteria and your individual circumstances. 

Eligibility criteria: examples used by Australian lenders

Among the Big Four Banks, eligibility for mortgage repayment holidays differs slightly: 


ANZ offers financial hardship assistance, and eligibility is assessed on a case-by-case basis. Qualifying ANZ customers can apply for a home loan repayment holiday or switch to interest-only repayments. 

Commonwealth Bank 

CBA customers can apply for a mortgage repayment holiday for a period of between three and 12 months if they have a redraw facility with enough money to cover their required monthly repayments.  Otherwise, you must contact the bank directly to apply for financial hardship. 


Like the CBA, you can use extra accumulated funds if you’re ahead on your minimum repayments for a repayment holiday. Alternatively, contact NAB’s customer support team to apply for financial hardship to qualify. 


Westpac offers mortgage repayment holidays, reduced repayments, interest-only repayments and extended loan terms for eligible customers. Contact their team or visit a branch to discuss your options. 

» MORE: 10 questions to ask your mortgage lender

Ways to pause mortgage repayments

Lenders have different options and criteria for repayment holidays. If you are struggling to meet your repayments, your options may include:

Reduce your repayments 

Instead of putting your repayments on pause, you would temporarily reduce the amount you repay to something more manageable. 

» MORE: Understanding your mortgage amortisation schedule

Extend your home loan term

Typically, borrowers take out home loans in Australia for up to 30 years. If your mortgage term is less than 30 years, you can extend it to lower your repayments, which could give you some financial relief. However, you will end up paying more interest over the loan term. 

» MORE: How long will it take to pay off my mortgage?

Temporarily switch to interest only repayments 

You can also switch to interest only repayments temporarily. Your repayments will be lower in this scenario, but you won’t pay off any principal. Generally, this leads to paying much more in the long run. 

» MORE: Types of home loans in Australia

Should you put mortgage repayments on hold?

If you struggle to pay your mortgage, a holiday is a break. However, it may lead to more troubles in the future. Here are a few factors to consider to help you make the decision. 

Possible advantages

Potential risks

  • You are just delaying your debt rather than addressing it.
  • Your interest can capitalise while you are on a repayment holiday, meaning you owe more money when you resume repayments. 
  • Your credit score can be affected, making it harder to borrow in the future. 

Other ways to get help with mortgage payments 

If your financial situation is not likely to improve in the short term, you may also consider: 


Your home loan’s interest rate influences your repayments. If your lender has increased your variable rate, your repayments will also increase. However, you may be able to find a loan with a lower rate, and refinancing will lower your repayments. 


Unfortunately, some borrowers experiencing financial hardship may be forced to sell their properties. If your financial difficulties look like they’re becoming a long-term problem, selling may allow you to avoid future debt and credit score penalties. 

Seek help

There are organisations and resources available to assist you in navigating this difficult time. Places to seek help include: 

  • MoneySmart website: offers legal and financial counselling to help you understand your options.
  • National Debt Helpline: provides consultations with financial advisors.
  • WayForward: a free service for those experiencing financial hardship.
  • BeyondBlue: a free service offering mental health support. 

» MORE: What is financial counselling?


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