A mortgage repayment pause that supports a growing family

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Caring for a young family or welcoming a new member can place a pretty big strain on finances. Incomes decrease for a period of time, medical and daily living expenses can change.

At Bank Australia we don’t want this to interfere with the excitement of this precious occasion – we want to support families through this time.

To do this, we offer customers the option of pausing their home loan repayments to give them some breathing space. This allows borrowers to take a break from payments for three months, or halve them for six.
Whether it is welcoming a new family member or it’s a possibility way into the future, it’s a feature worth considering.

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How long can customers pause their repayments for?
With a parental-pause, customers can pause their repayments for three months or halve them for six months.

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“Using Bank Australia’s parental home loan pause eased a lot of financial pressure during the first few months of our baby’s life. Instead of worrying about our mortgage repayments, we had space to find our feet as a family. I could be more present, less stressed and a better parent.” – Taryn Stenvei, Bank Australia customer

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Eligibility criteria

A couple of key criteria customers need to meet to eligible for the pause include:

• Borrowers must be owner-occupier or investor to be eligible.
• Loans must be on principal and interest repayments.
• Loan has to have been established with Bank Australia for at least 12 months.
• While repayments are paused, interest will still accrue.

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Parental pause terms and conditions

Customers may apply for a 3 month break in repayments, or a 6 month reduction (up to half) of their repayments on their loan, subject to the following conditions:

• Owner-occupiers and investors are eligible.
• A request must be provided detailing an inability or choice not to work in favour of caring for their child (evidence of maternity/paternity leave approval may be required).
• The loan must be established with Bank Australia for at least 12 months before applying for a repayment pause.
• Accounts must be operated within Bank Australia terms and conditions prior to the request, and loans must not be in arrears or have had any repayments missed within the six months prior to the request.
• Excludes Bridging loans, Interest Only loans and Home Equity loans .
• Subsequent repayment pause can be made no sooner than 12 months from completion of any previous repayment pause.
• A maximum of 2 repayment pause breaks are permitted for loans that are subject to Lenders Mortgage Insurance (LMI).
• Loans that exceed a loan to value ratio (LVR) of 90% are not automatically eligible.
• Loan repayments may need to be recalculated at the conclusion of the break to ensure the loan term does not exceed the maximum permitted by Bank Australia or the LMI insurer.

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Bank Australia wants to support you in every stage of life. Unlike many other financial institutions, we are open to home loan applications from people who are on (or are planning on taking) parental leave. 

It’s worth noting that the application process for a home loan while on maternity or paternity leave is the same as if you were employed, and you will be asked to provide the following personal information:

• Personal and contact details
• Citizenship status
• Employment and income
• Regular bills and credit limits (rent, cards, other loans, pay later products)
• Discretionary spending like sporting memberships, travel and so on

It’s a good idea to start gathering this information early in the process, keeping an eye on the details of possible changes to discretionary spending and bills.

If your situation is complicated or you’d like to talk things through, please feel free to contact a Bank Australia sales rep who can discuss your personal circumstances in more detail. 

Bank Australia contact: 132 888. 

For more information on applying for a Bank Australia home loan, head here.

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