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What Happens When Your Mortgage Repayment Deferral Ends?

If you’re a homeowner in Australia, you might have experienced some relief in the form of a mortgage repayment deferral. This measure was introduced to help homeowners during challenging times, such as the COVID-19 pandemic. However, all good things must come to an end, and that includes mortgage repayment deferrals. In this article, we’ll delve into the nitty-gritty of what happens when your mortgage repayment deferral ends and how it can impact your financial situation.

Understanding Mortgage Repayment Deferrals

Before we jump into the consequences of the end of a mortgage repayment deferral, let’s first clarify what this financial arrangement entails.

Mortgage Repayment Deferral Explained

A mortgage repayment deferral is a temporary agreement between you and your lender that allows you to postpone making your regular mortgage payments for a specified period. This period can vary but is typically between three to six months. It was designed to provide financial relief to homeowners facing hardships, like job loss or reduced income, making it difficult for them to meet their mortgage obligations.

Interest Still Accrues

One critical thing to note during a mortgage repayment deferral is that interest continues to accrue on your outstanding balance. This means that even though you’re not making monthly payments, your mortgage debt is not frozen. The interest charges are added to your principal, and you’ll owe more when the deferral period ends.

The End of Mortgage Repayment Deferral

Now, let’s address the main topic of this article: what happens when your mortgage repayment deferral ends.

Resumption of Monthly Payments

When the deferral period comes to a close, you’ll be required to resume your regular monthly mortgage payments. This means you’ll need to start paying both the principal and the interest again. Your lender may also adjust your monthly payments to ensure you can catch up on the deferred amounts

Repayment of Deferred Amounts

In addition to your regular payments, you’ll also need to repay the deferred amounts from the months when you didn’t make payments. This can be done in various ways, depending on your lender’s policies. Some options include adding the deferred amounts to your existing loan balance or setting up a separate repayment plan.

Impact on Your Budget

The end of a mortgage repayment deferral can have a significant impact on your monthly budget. You’ll need to allocate funds for your regular mortgage payments and the repayment of deferred amounts. It’s crucial to assess your financial situation and create a budget that accommodates these additional expenses.

Planning for the Future

As the end of your mortgage repayment deferral approaches, it’s essential to plan for the future.

Review Your Finances

Take a close look at your financial situation. Evaluate your income, expenses, and any outstanding debts. This assessment will help you determine how you can comfortably manage your mortgage payments and the repayment of deferred amounts.

Communicate with Your Lender

Don’t hesitate to reach out to your lender before the deferral period ends. Discuss your options and any concerns you may have. They may be able to offer guidance or alternative solutions to make the transition smoother

Consider Refinancing

If you anticipate difficulties in resuming your regular mortgage payments, consider exploring mortgage refinancing options. Refinancing can potentially lower your monthly payments or provide more favorable terms, making it easier to manage your finances.


In conclusion, a mortgage repayment deferral can provide much-needed relief during tough times. However, it’s essential to prepare for the end of this deferral period carefully. The resumption of regular mortgage payments and the repayment of deferred amounts can impact your budget significantly. By reviewing your finances, communicating with your lender, and exploring refinancing options, you can navigate this transition successfully.

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