How to keep paying off your home loan if you’ve lost your job.

It’s always a good time to pay less for your home loan, but there is never a better time than when you are in career transition.

Everyone will experience career transition differently based on your individual circumstances. This is even more true when you are considering the financial implications of this significant life event.

Every day at Finspo we work hard to help people pay less for their home loans.  We are particularly passionate about helping people manage their home lending through significant life events, like a career transition.

Discover three home loan things to consider when you have lost your job

A key part of overall wellbeing is financial wellbeing. A key component of financial wellbeing is feeling like you have your finances under control. Getting a good handle on your home loan, and the rest of your banking, is never more important than during a career transition.

It’s then one less thing to worry about.  Make every dollar work as hard as you are working on finding your next opportunity.

Everyone experiences some form of financial stress

For many people, losing their employment security creates significant financial stress. This can be real or perceived but either way, it’s real stress!

How much stress you are experiencing could depend on your answers to some simple questions such as:

  • Is my partner still working?
  • Do I have a savings nest egg that will help me bridge the gap between now and when I find a new job?
  • If I received a redundancy payment, is it sufficient to keep me going until I get a new job?
  • Do I have unusual or significant expenses coming up?

Regardless of the answer to these questions, one thing is true – there is never a better time to ensure your home loan is suited to your situation and to make sure you aren’t paying more than you need to than when you are in career transition.

Don’t pay more than you have to

Depending on your situation the following options are worth considering. All of them can be actioned directly by you from home or if you do need some support, one of Finspo’s Home Loan Experts can lend a hand:

  1. Seeking a repayment pause, reduced or interest only repayments

Banks and lenders typically have dedicated teams to help customers who are experiencing financial hardship be it minor and temporary or more serious and long term. If you feel that meeting all of your commitments while you are on the hunt for a new job is going to be a significant struggle it is a good idea to give your bank or lender a call and discuss your options.

The trouble is that different lenders have different names for these teams so it can be hard to know who to ask for – the most common lingo used is the ‘hardship’ team or department. Explain that you are in career transition and that you need some options with your commitments to help you until your find your next job.

The Australian Bankers Association has a good source of contact details for the bank’s hardship or financial assistance teams.

  1. Ensuring you are on the lowest rate available from your existing lender

Every dollar counts. This is true at the best of times and even more so when you are in a period of career transition. Make sure that you are on the best possible rate your current lender will provide by contacting them and re-negotiating. You can use the Finspo Interest Rate Negotiation Script – many Finspo customers have used it to great effect – or you can seek the support of a Finspo Home Loan Expert to help you with this process.

  1. Having any excess cash, such as a redundancy payment in the account(s) where it is working hard for you

For many it can make sense to set up an offset account, if one is available through your existing home loan, and then deposit any excess cash and savings sitting in other accounts to that offset account.

With a 100% offset account, any money you have sitting in that account comes off the amount you owe when your lender calculates the interest on your home loan. Over the term of your loan this can potentially save tens of thousands of dollars and reduce the time it takes to pay off your loan. Read our article ‘Could you save thousands with your offset account’ here.

Getting help from an expert

Finspo offers free home loan health checks to people in career transition. Many of us have been through it ourselves and we get the unique situation you are in. It could save you some money, help you out of a jam or simply give you the peace of mind that everything is under control. It’s easy and only takes 30 minutes.

This information is factual or general in nature and is not intended to include any recommendation or suggestion or constitute credit assistance about any of the products referred to in this insight. Finspo has presumed that any credit contract currently held by you will continue however this should not be treated as advice to do so. Please consider whether this information is right for you before making any decisions and seek professional independent tax or financial advice. Conditions and fees may apply. 

Finspo ABN 34 637 821 928 Australian Credit Licence 521120.

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