We all know that the arrival of Covid-19 in this country and the resultant social isolation restrictions have had an impact on the finances of many Australian families. Business closures, the loss of employment or reductions in income have all taken their toll on many people’s household budgets. What many people may have overlooked is that there are several important financial deadlines in coming months that could affect the finances of Victorians even further.
For all those homeowners who decided to take up the ‘mortgage repayment holiday’ that the banks offered in the early stages of the lockdown, the first key date you need to be aware of is the end of this month. Whilst the Banks have extended the end date for the mortgage holiday to March next year, eligibility for this extension has been tightened, so you will need to demonstrate financial hardship if you wish to extend your repayment holiday beyond September.
The CEO of the Australian Banking Association, Anna Bligh, was recently quoted in Domain as saying that banks would be assessing deferrals individually, but they would take into account the “wider circumstances of the sector of the economy they work in and any geographic impacts such as the continued restrictions and lockdowns in Victoria”.
Ms Bligh also said that “Banks will be acutely mindful that there are many of their Victorian customers who may need additional support and need more time to get back on their feet.”
Even if those Victorians who are experiencing financial hardship are able to extend their mortgage holiday until March next year, they need to remember that their loan is still accruing interest throughout this period, as the holiday relates to repayments, not interest charges.
With this in mind, some people may find that another key decision that they will need to make is whether they may be better off selling their current property and, if so, when the best time to do this might be.
Decisions of this nature are not to be taken lightly, requiring careful consideration of all the different factors that come into the equation. This is an excellent example of a time when the experienced advice and guidance of an objective property professional can be so valuable. So if you need any property-related help in these challenging times, don’t hesitate to call the team at Ian Reid Buyer and Vendor Advocates on 9430 0000.