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Mortgage stress handbook

11. Mortgage assistance

The government provides assistance to eligible low-income families so they can buy and maintain their homes. Mortgage assistance is available in The Australian Capital Territory, Victoria and Queensland. The eligibility requirements and types of assistance offered vary widely between jurisdictions as detailed below.

Australian Capital Territory

Administered by:

ACT Revenue Office. To get an application form go to the ACT Revenue Office website and then click on Home Buyer Assistance > Mortgage Relief or call 02 6207 0028.

Amount available

The maximum amount payable for an approved mortgage relief loan is $10,000. The loan can only be used as payment towards arrears on the mortgage or a combination of arrears and future mortgage payments (arrears capped at $5,000).

Key eligibility criteria

  • Recent and unforeseen change in circumstance which has led to short term mortgage stress; and
  • Must be an owner-occupier; and
  • Cannot own any other interest in property anywhere, including those held under a trust; and
  • Minimum of 10% equity in your home to provide security for any assistance given; and
  • Total value of the property must not exceed the median house price in the ACT applicable (currently $535,000). This figure is based on the actual sales data from the ACT Planning and Land Authority and is updated every 6 months to reflect the current housing market; and
  • Be able to demonstrate that you have contributed some funding towards current mortgage repayments in the 6 months before making an application; and
  • Have proof of current home insurance—Certificate of Current Insurance.

Repayment arrangements

A mortgage relief loan, if approved:
  • will be paid directly to the applicant’s home loan account at the relevant lending institution; and
  • will be repayable over a 5 year period, with repayment of the loan to commence 6 months after the funds have been provided to the applicant’s relevant lending institution; and
  • will be interest free; and
  • will be secured by way of a caveat over the property for which the mortgage relief loan is sought.
  • Immediate repayment of a mortgage relief loan is required in the event of the sale of the property, refinance or renegotiation of the mortgage on the property.

Victoria

Administered by:

Housing and Community Building, Department of Human Services, please call (1800 134 872) or visit www.housing.vic.gov.au then click on the link Home Owners Support > Mortgage Relief to find out more.

Amount available

  1. An interest free loan to assist with the portion of the loan repayments that exceed more than 27% of gross income.
  2. An interest free loan to a maximum of $7,000 to assist with repayment arrears. Inital assistance is for 12 months with the potential to extend for a further 12 months.

Key eligibility criteria

  • Original loan must not have exceeded $445,500; and
  • money borrowed must have been spent on purchase or construction; and
  • Total of housing loan and assistance advance must not exceed 95% of property valuation ; and
  • Loan not a vendor’s term contract or provided by private individual; and
  • Must be principal residence; and
  • Loan repayments must exceed 27% of gross income; and
  • Difficulties caused by unavoidable change in circumstances; and
  • Must have capacity to recommence loan repayments once assistance ceases; and
  • NOT available if the house on the market or subject to a property settlement agreement; and
  • Written application form, including information and certification from lender.

Repayment arrangements

When assistance ceases you will be expected to start making full loan payments and to start repaying the loan assistance granted. Repayments can be lump sum, or monthly instalments. No maximum term specified, although sale or refinance triggers requirement to repay in full. Interest secured by mortgage in favour of Director of Housing.

Queensland

Administered by:

Department of Housing, please call 1300 654 322 or visit their website then click on For Queenslanders > homes and housing > financial help and concessions > mortgage relief loan to find out more.

Amount available

Interest free loan to a maximum of $20,000, paid directly to home lender, to clear arrears and to subsidise repayments for a period of up to 6 months.

Key eligibility criteria

  • The mortgage balance must be less than $500,000; and
  • There must be sufficient equity in the home to secure the assistance provided; and
  • Must be principal place of residence and cannot own additional property; and
  • Must be in financial difficulty, in danger of losing home and the change in circumstances must have caused the level of payments required to exceed 30% of gross household income; and
  • Must have taken all reasonable steps to meet liabilities and have been making loan repayments more than 30% of gross household income; and
  • Written application form, including information and certification from lender.

Repayment arrangements

  • You will be contacted 12 months after the loan is provided to arrange for monthly payments to commence.
  • The maximum term is 10 years.
  • Repayment in full is required on sale of home or refinance or renegotiation of loan. Interest secured by registered mortgage to Department of Housing.