5 Million+ Struggle with Mortgage Payments
Nationwide Research Highlights Mortgage Payment Struggles
New nationwide research released by ASIC’s Moneysmart reveals that 47% of Australian adults with debt, equivalent to 5.8 million people, have struggled to make repayments in the last 12 months. This statistic underscores a significant financial strain faced by many Australians, particularly in the context of mortgage payments.
The Gap in Awareness and Assistance
Alarmingly, the research revealed that more than half of those surveyed are unaware that they are entitled to ask their bank or lender for financial hardship assistance. This lack of awareness is a critical issue, as it means many individuals are not utilising available resources that could alleviate their financial burdens.
Furthermore, only one in five surveyed said they had ever sought financial hardship assistance. This indicates a substantial gap in both knowledge and action regarding financial relief options.
Around 30% of respondents also stated that they would not seek a hardship assistance arrangement from their bank or lender. Instead, they would prefer to sell assets or get a second job rather than engaging with their financial institution.
Understanding Financial Hardship Assistance
Financial hardship assistance is designed to help individuals manage their debt when they face unexpected financial difficulties. It is a form of relief that can be negotiated with lenders to ease the burden of debt repayments. This assistance can come in various forms, including:
- Reduced Repayments: Temporarily lowering the amount of monthly repayments.
- Payment Deferrals: Pausing repayments for a certain period.
- Loan Restructuring: Adjusting the terms of the loan to make repayments more manageable.
- Interest Rate Reductions: Lowering the interest rate to decrease overall repayment amounts.
These options can provide significant relief for those struggling with mortgage payments, allowing them to maintain their financial stability without resorting to more drastic measures such as selling assets or overextending their work commitments.
The Importance of Seeking Help
Despite the availability of financial hardship assistance, many Australians are hesitant to approach their lenders. This reluctance often stems from a lack of understanding about the process or fear of negative repercussions. However, it is important to recognise that lenders are generally willing to work with borrowers to find a solution that benefits both parties.
Steps to Take if You Are Struggling with Mortgage Payments
- Assess Your Situation: Understand your financial position, including income, expenses, and debts.
- Contact Your Lender: Reach out to your bank or lender to discuss your financial situation and inquire about hardship assistance options.
- Seek Professional Advice: Consult with a financial advisor or accountant to explore all possible avenues for managing your debt.
- Consider All Options: Evaluate the different forms of assistance available and choose the one that best suits your needs.
- Stay Informed: Continuously educate yourself about financial management and available support resources.
The Role of Advisors
Financial advisors and accountants play a crucial role in guiding individuals through financial hardships. At ASB Consulting & Tax, we understand the complexities of managing debt and are here to support you every step of the way. Our personalised approach ensures that you receive tailored advice and strategies to navigate your financial challenges effectively.
Taking control of your financial future
The findings from ASIC’s Moneysmart research highlight a pressing issue faced by millions of Australians. Understanding and utilising financial hardship assistance can provide much-needed relief and prevent further financial strain. If you are experiencing mortgage payment struggles, it is crucial to take proactive steps and seek the help you need.
Get professional help
If you are struggling with mortgage payments or any other financial challenges, contact ASB Consulting & Tax today. We can help you explore your options and develop a plan to regain financial stability.
