Managing Your Mortgage During Job Loss

Losing your job while carrying a mortgage can be intensely stressful. A sudden job loss may support an unforeseen-hardship application. Contact the lender early, because eligibility and available contract changes depend on the legal time limits, your loan and the evidence you provide.

Unarranged missed payments can add interest or fees and may affect enforcement or credit reporting under the contract. Contact the lender early, document the discussion and keep paying as agreed unless the lender confirms a change in writing.

Contact Your Lender Immediately

Contact the lender as soon as you expect repayment difficulty. Ask for its hardship-application process and submit the required information in writing before missed-payment limits restrict a statutory application.

For an unforeseen-hardship application, the lender must assess the application carefully, diligently and skilfully and treat the borrower reasonably and ethically. It must consider a valid application, but it does not have to approve a contract change.

• Be honest about your situation; explain what happened and when your income stopped or reduced.
• Provide a realistic assessment of when you expect your situation to improve.
• Ask specifically about hardship assistance and what options are available.
• Request everything discussed in writing for your records.

Understanding Mortgage Holidays

A repayment holiday is one possible hardship change. It is not automatic and has no universal duration; the lender's written decision should set out the payment, interest, term and review details.

Ask the lender to explain the exact effect of a proposed variation. Depending on its terms, interest or fees may continue, the balance or term may increase, and future payments or total repayment may change.

A reliable cost cannot be calculated from a payment, rate and short period alone. Ask for a written illustration showing the proposed payment schedule, interest and fees, balance, remaining term and total amount repayable before agreeing to a variation.

Other Options Your Bank May Offer

A lender may consider a term extension, a repayment holiday or both through a hardship application. Any other arrangement is lender-, contract- and circumstances-specific.

Reduced or interest-only payments: ask whether the lender offers them and obtain the exact interest, fee, payment, term and total-repayment effect; they are not guaranteed or always cheaper than another arrangement.

Extended loan term: Stretching your mortgage over more years reduces each payment, though it increases the total interest you pay over the life of the loan.

Restructuring: ask whether changing loan portions is available and compare any break costs, fees, rates, payments, term and total repayment before assuming it lowers the overall cost or payment.

Redraw or revolving credit: access depends on the actual facility terms and credit limit. Confirm availability, interest, fees and repayment consequences with the lender before relying on it.

Government Assistance Available

You may qualify for Jobseeker Support if you meet Work and Income's current criteria. Eligibility and payment depend on matters including work status, age, residence, obligations, your situation and income for you and any partner.

Accommodation Supplement can help with the cost of owning a home for eligible people. Work and Income assesses minimum accommodation costs, income, assets and household circumstances; use its current checker or application process rather than assuming eligibility.

• Use Work and Income's current eligibility checker for urgent or ongoing help
• Ask what evidence of income, assets, housing and essential costs is required
• Check any insurance policy or employment agreement for applicable cover or entitlements
• Tell Work and Income and the lender promptly if your circumstances change

Free Help Is Available

You do not have to navigate this alone. New Zealand has free budgeting services staffed by trained financial mentors who can help you assess your situation, create a survival budget, and even advocate on your behalf with creditors.

MoneyTalks: Free financial helpline staffed by trained financial mentors. They can help you work through your options and connect you with local services. Call 0800 345 123 or text 4029.

Citizens Advice Bureau: Free information and advice on a wide range of issues, including financial difficulties and your rights as a borrower.

Community Law Centres: Free legal advice if your situation becomes complex or if you feel your lender is not treating you fairly.

What About Selling Your Home?

If the repayment shortfall may be long-term, ask the lender and an independent financial mentor to compare the written hardship options with a voluntary sale. Get legal advice before an enforcement deadline or sale decision; neither keeping nor selling the home is automatically right for every borrower.

A voluntary sale may provide more involvement in timing and marketing, but price, debt shortfall, fees, credit reporting and lender consent are case-specific. Obtain the loan payout figure, sale-cost estimate and legal advice before comparing it with continued borrowing or enforcement.

Looking After Yourself

Finally, remember that financial stress takes a genuine toll on mental health. Job loss combined with mortgage pressure is one of the most stressful combinations anyone can face. Look after yourself. Talk to friends and family. Access counselling services if you need them. The 1737 helpline provides free support for anyone feeling stressed or anxious.

Your home matters, but so do you. A prompt, documented plan with the lender, Work and Income, a financial mentor and legal or wellbeing support can make the available options clearer without promising a particular outcome.