Asking for a hardship variation - Mortgage stress

Mortgage stress logoWhen you apply for a hardship variation you can ask for any change that will make your loan repayments more affordable or give you time to sell your house if you have decided you cannot keep up the mortgage repayments. 

For example, you could ask the lender to:

  • extend your loan period, so you make smaller repayments over a longer period
  • postpone your repayments for an agreed period, or
  • do both of those things.
Important information

You should keep making whatever payments you can while you are waiting for a response to your application for a hardship variation.

Step 1: Working out what to offer

Before you do anything, you need to work out what you want to offer as a repayment arrangement. Be realistic. The repayment you offer must be affordable. You must be able to make the new repayment each month. 

Do not offer to make repayments you cannot afford. 

To work out how much you can afford to put towards mortgage repayments, it is a good idea to make a budget. As a guide, the repayment you offer should not be more than 50 – 60% of your income. You need to make sure you have enough income for food and bills. 

It may help to speak to a free financial counsellor to:

  • work out what you can realistically afford to repay, and
  • help you apply for a hardship variation or negotiate with your lender.

You can also get more information about creating a budget from the MoneySmart website.

What if I can't afford to make any repayments?

If you cannot afford to make any repayments, then you will need to ask the lender to let you postpone or suspend repayments for a period of time

Making no repayments can, however, have serious consequences:

  • Your lender is less likely to consider further requests for hardship variations if you have not been making any repayments.
  • Your debt will grow fast, as you will still be charged interest on the loan amount.
  • You will get out of the habit of budgeting and making regular repayments. 

Step 2: Plan to return to usual payments

You need to give the lender a plan on how you will return to making the usual repayments.

If your financial hardship is because of illness or unemployment, you may not know exactly when you will be able to return to making the usual repayments. Estimate how long you will need and then ask for more time, if required.

 If there is no clear future plan for how or when you will be able to return to your normal repayments, you may need to consider selling your home. 

Get help with mortgage stress

Where to get legal advice and financial counselling to help with mortgage stress.


The information displayed on this page is provided for information purposes only and does not constitute legal advice. If you have a legal problem, you should see a lawyer. Legal Aid Western Australia aims to provide information that is accurate, however does not accept responsibility for any errors or omissions in the information provided on this page or incorporated into it by reference.