Important Coronavirus Update for Renters

If you are a renter, you may have heard that your landlord can skip their home loan repayments.

Unfortunately, this is not accurate.

Anyone with a mortgage, if they are experiencing financial hardship, can only delay their home loan repayments, but they still have to pay them in full.

In fact, when a property owner delays their home loan repayments, they end up paying more. This is because the lender still charges the full interest and fees over the delayed period, then they charge interest on top of this accrued interest.

The equivalent would be a tenant delaying paying their rent for a few months, but then having to catch up all the missed payments plus compounding interest on the delayed amount, plus pay the new rent at the same time.

As much as we would like it to be true, lenders always still charge interest, and the longer a loan is delayed the more it costs.

This misunderstanding is causing some renters to feel they are unfairly paying rent when their landlord is getting some kind of holiday from their home loan, but this is definitely not the case.