The Government response to the Coronavirus has been extensive and is expected to affect even more areas of the economy (and workforce) over the coming months.  Consequently, many Australians are heading towards mortgage stress despite record-low interest rates.  It is anticipated that as many as 1 million Australians potentially face unemployment as a result of workplace closures due to Covid-19.

With such huge numbers of Australians facing very uncertain financial futures, many lenders are allowing their customers to “freeze” or “pause” home loan repayments.   This mortgage relief ranges in length from 3 to 6 months and revolves around allowing interest to be “capitalised”.

What is Capitalisation of Interest?

When a lender allows you to capitalise your interest it means that you can add your interest to your existing loan balance.  Say you had:

  • a $300,000 loan,
  • with an interest rate of 3%, then
  • your repayments would be $1,264.81 per month

Your interest due over the next 6 months would look like the following:

MonthInterest Due
Total Interest$4,481

So at the end of the 6 month mortgage pause, the $4,481 gets added to your home loan.

Different lenders will treat your new situation in different ways.  For example:

  • Westpac will increase your repayments because you now owe a higher amount ($300,000 + $4,481 interest) over a shorter time (6 months shorter home loan), whereas
  • Commonwealth will keep your repayments the same as before the mortgage pause BUT increase your home loan term by 6 months.

Each lender will treat this according to their own internal policy.  The Mortgage Relief List at the bottom of this article includes links to the various lender pages outlining their financial assistance to those affected by Coronavirus.


Are their any other things to be aware of?

  • If you have an offset account you may be required to use your offset balance to meet repayments before applying for financial hardship
  • The same may apply for situations where you are ahead with your repayments and have funds available to redraw from your home loan


Coronavirus: Lender Mortgage Relief & Financial Hardship List

Below is a list of the various lenders.  Click the link to be taken to their respective Financial Hardship page or their specific Covid-19 Financial Assistance Package page.


Mortgage Relief LinkFinancial Assistance Line
Adelaide Bank1300 650 259
AMP Bank13 30 30
ANZ1800 252 845
Australian Military Bank1800 855 810
Auswide Bank1300 077 969
Bank Australia13 28 88
Bank of Sydney13 95 00
BankWest1300 769 173
Bendigo Bank1300 652 146
Better Choice 
BOQ1800 079 866
CBA13 22 21
Citibank1300 300 470
Heritage Bank13 14 22
ING13 34 64
La Trobe1800 620 639
Liberty13 11 33
ME Bank13 15 63
MyLoan (Advantedge)
MyState13 80 01
NAB1300 683 106
Pepper1800 356 383
Qudos Bank1300 747 747
St George 
Suncorp13 11 55
Teachers Mutual Bank1800 862 265
Westpac1800 067 497