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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 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 www.revenue.act.gov.au/home-owner-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 that corresponds to the ACT’s Home Buyer Concession Scheme (www.revenue.act.gov.au/home-buyer-assistance/home-buyer-concession-scheme). Eligibility applies to the current period. This figure is based on the actual sales data from the ACT Environment, Planning and Sustainable Development Directorate (www.planning.act.gov.au) 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.

Queensland

Administered by:

Department of Housing, please call 1300 654 322 or visit www.qld.gov.au/housing/buying-owning-home/financial-help-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.