When your home loan is overdue, a refinance is only one possible path. Contact the lender early, understand any deadlines and establish what repayment is actually affordable.
Prepared for Reduce My Repayments by Monet Finance · Updated 6 October 2026 · General information for Australian homeowners
Find the current position in writing
Ask the lender for the overdue amount, next required payment and status of any hardship request. Locate default notices, legal letters and other correspondence. An application with another lender does not suspend the current loan or cancel its deadlines.
If a notice threatens enforcement, obtain legal advice promptly. Do not rely on a generic online timeline: the document, loan circumstances and applicable process matter. Free financial counselling can help organise the financial position and discussions with creditors.
Distinguish a temporary disruption from an ongoing gap
A temporary illness, delayed invoice or short period between jobs may need a different response from income that is consistently below costs. Write down dependable income, essential expenses and all debt commitments. Include upcoming expenses rather than only the bills due this week.
An invented household that can restart normal repayments next month but cannot clear a accumulated balance at once may need an arrangement for that balance. A household that cannot fund the normal instalment needs a broader affordability plan. Neither position should be hidden in a refinance application.
Ask about assistance while exploring options
Explain the difficulty to the existing lender and ask what assistance may be considered. Get any agreed terms in writing, including payment amounts, duration, interest treatment and what happens at the end. Continue communicating if circumstances change.
A repayment pause or reduced instalment can provide time, but it may leave amounts to repay later. Ask what the loan balance and future payment could look like. Do not treat temporary assistance as forgiveness of the debt unless the written arrangement expressly says so.
What a refinance would have to achieve
A new lender needs a clear payout position and evidence that its proposed repayment is sustainable. The new borrowing may need to cover arrears and refinance costs as well as the intended consolidation. Property equity alone does not establish that the household can service the loan.
Compare the new total secured debt, rate, term and fees. Extending the term can lower the required payment while increasing total interest. A higher rate applied to the entire mortgage can also erode the benefit from consolidating smaller debts.
Keep a contingency if settlement does not happen
Conditional approval, valuation booking and document signing are milestones; none is the same as a completed refinance. Keep the existing lender informed and ask advisers what happens if a condition is not met or settlement is delayed.
If keeping the property is no longer financially realistic, discuss alternatives with qualified advisers early. Making an informed plan with time available is better than assuming an unconfirmed loan will resolve an urgent deadline.
What to prepare
- Mortgage statement, arrears figure and payout information
- Every notice or legal letter and its deadline
- A complete budget and any hardship correspondence
Your questions answered
Does applying to refinance stop enforcement?
No. Ask the existing lender and a legal adviser about your actual position and deadlines.
Can arrears be included in a refinance?
That depends on lender policy, payout requirements, equity and affordability. It is not automatic.
Who can help if I cannot meet essential costs?
The National Debt Helpline provides access to free financial counselling on 1800 007 007.