21 Jun 2021

What Happens to my Real Interest Liability When I Request a Freeze on My Home Loan Payments?

Home Loan Application Documents: What Paperwork Do I Need?

The mortgage application process remains stringent. Several things can occur in 30 years. A lender’s goal is to minimise risk to a bare minimum. Then, when a homeowner requires a payment delay, it’s more likely to be a one-time request.  A reason to request a freeze on my home loan can occur. In several cases, the lender will grant the request, but it’s important to know how it affects the mortgage thereafter.

Lenders help clients stay caught up with their repayments. If freezing the repayments helps, the lender sets it up. The one thing that doesn’t freeze is the interest rate liability. Although you receive a reprise from the payments, interest rate charges continue to accrue.

In this situation, homeowners should consider paying off the interest each billing cycle. Paying off the interest almost becomes optional while the mortgage repayments remain frozen. When you start making your repayments, however, the outstanding interest charges roll into the total outstanding mortgage amount, also known as capitalisation. This makes your total mortgage more expensive.

For some individuals, it’s necessary to go through this despite the additional cost. It helps get them to the other side of their current financial situation. We’ll take a look at home loan interest rates to see if there are other options.

Freeze on My Home Loan

If you require a freeze on my home loan, go over the details with the lender. Mortgage House clients go over how it impacts their real interest liability. Although the repayment remains frozen for a time period, the interest rate continues to accrue. For more information, speak with our loan specialists.

Fast track your home loan
Apply Online Book a Call Back
133 144

Why Choose Mortgage House?

Award Winning

Experienced

Approachable

Innovative