Struggling With Your Mortgage After the Rate Rise? Where to Get Help in Newcastle, Lake Macquarie and the Hunter

Today’s rate rise is the fourth this year, and it may not be the last. After the decision, Herron Todd White chief economist Cameron Kusher said the market “currently expects that it is more likely than not there will be another rate increase before the end of the year and then another interest rate increase in 2027.”

For a lot of households in Newcastle, Lake Macquarie and the Hunter, the budget was already tight before today. Roy Morgan estimates 32.5 per cent of Australian mortgage holders were at risk of mortgage stress in July, about 1.79 million people. That is the highest level in 18 years, and it was measured before today’s rise.

If you are one of them, this article is for you. It covers the warning signs, your legal rights, what your lender can actually do, and where to get free help here in the Hunter. The most important message comes first: the earlier you ask for help, the more options you have.

Why Asking Early Changes Everything

I have sat across the table from people who waited until they were three months behind before telling anyone. Almost without exception, they wish they had called sooner. Once you are in arrears, missed repayments start appearing on your credit report, fees build up, and the options narrow.

Ask while you are still up to date, or only just behind, and the conversation is completely different. Lenders have far more room to help someone who is struggling than someone who is already in default. Australia’s banks say it themselves: their industry guideline on financial difficulty says that early intervention “can prevent customers that are experiencing issues with their financial situation from falling further into difficulty and defaulting.”

Warning signs worth taking seriously

• You are putting groceries, fuel or bills on a credit card because the cash has run out before payday.
• You are drawing down your redraw or offset balance to make the mortgage repayment.
• You are juggling which bills to pay late this month.
• You have skipped or reduced insurance to free up cash.
• You feel a knot in your stomach when a letter from your lender arrives.

None of these mean you are in serious trouble. They do mean it is time to act, not wait.

Your Legal Right to Ask for Hardship Help

This is the part most people do not know. Under section 72 of the National Credit Code, if you cannot meet your repayments you have a legal right to give your lender a hardship notice. It covers home loans for your own home and residential investment loans, and you can give it verbally or in writing.

Once you do, your lender has obligations:

• It must respond within 21 days. If it needs more information, it must ask for it within 21 days, and it then has more time to decide once you reply.
• If it says no, it must tell you why, in a notice that also gives the contact details for the Australian Financial Complaints Authority, so you can take it further.
• Banks pause collections. Banks that follow the Banking Code of Practice have committed not to pursue collections while your hardship notice is being considered, or while you are keeping to an agreed arrangement.

These rules have teeth. In 2025 the Federal Court ordered NAB and its subsidiary AFSH to pay $15.5 million after ASIC found they failed to respond to 345 hardship applications within the 21-day timeframe. My practical advice is simple: make your request in writing, or follow up a phone call with an email, and keep a copy.

What Your Lender Can Actually Do

A hardship arrangement is not one fixed product. The Australian Banking Association’s guideline lists the kinds of help banks may offer, depending on your circumstances:

• Pause or defer repayments. A short break from repayments. Trade-off: Interest usually keeps building, so your balance grows.
• Reduced or interest-only repayments. Lower repayments for a set period. Trade-off: You are not paying down the loan during that period.
• Extend the loan term. Spreads the balance over more years, lowering each repayment. Trade-off: You pay more interest over the life of the loan.
• Capitalise arrears. Missed repayments are added to the loan balance. Trade-off: Clears the arrears, but increases what you owe.
• Waive fees, change repayment dates or frequency. Lines repayments up with your pay and removes penalty fees. Few downsides, and worth asking for.
• Review your interest rate. A lower rate on your existing loan. No downside, if they agree.

One more commitment is worth knowing. Under the Banking Code, banks will not require you to access your superannuation to pay your loan, unless the loan is for a self-managed super fund.

Will it wreck my credit report?

This fear stops a lot of people asking, and it is mostly unfounded. Since 2022, a hardship arrangement shows on your credit report as financial hardship information, which stays there for 12 months. By law, it cannot be used to calculate your credit score. And if you keep to the terms of the arrangement, your repayment history shows as on time for that period.

Compare that with the alternative. Missed repayments with no arrangement in place are recorded as missed, and that does damage your credit history. A lender assessing you within that 12 months may ask a few more questions, but a hardship arrangement is far less damaging than a string of missed repayments.

How to Make the Call

Moneysmart, the Government’s consumer finance site, suggests asking for your lender’s hardship team (not general enquiries) and being ready with:

1. Your account name and number, and what you currently repay each fortnight or month.
2. A clear statement that you are experiencing financial hardship and want to change your repayments.
3. Why you are having difficulty, whether that is a rate rise, reduced hours, illness, separation or something else.
4. How long you expect the problem to last.
5. How much you can realistically afford to repay.

The last point is the one to prepare properly. Our pay calculator shows your real take-home pay, and the loan repayment calculator shows what different repayment levels or loan terms would look like. Walk in with a number you know you can keep to, not a hopeful one. An arrangement that fails after two months puts you in a worse spot than a modest one that holds.

Before It Gets to Hardship: Things Worth Checking

For many people, the right first step is not a hardship application at all. If you are stretched but still keeping up, these can take the pressure off:

• Ask your lender to reprice your loan. Existing customers often pay more than new ones for the same loan. A repricing request costs nothing.
• Look at your other debts. A car loan, personal loan or credit card can cost more each month than the rate rise did. The debt consolidation calculator shows your repayment if they were rolled into one, and the interest you would save.
• Review your structure. Repayment frequency, offset arrangements and fixed and variable splits can all be adjusted. Our guide to weekly, fortnightly and monthly repayments is a good start.
• Consider refinancing, with realistic expectations. A new lender assesses you at your new rate plus a 3 percentage point buffer. If your income has dropped or your expenses have climbed, refinancing may not be available. That is exactly the situation where your existing lender’s hardship team matters most.

Free Help in Newcastle, Lake Macquarie and the Hunter

Financial counsellors are qualified professionals who help people in financial difficulty. Their service is free, independent and confidential, and they can speak to your lender on your behalf. Banks have committed to dealing with your financial counsellor once you give them the counsellor’s details in writing.

• National Debt Helpline: 1800 007 007, weekdays 9:30 am to 4:30 pm, with live chat at ndh.org.au on weekdays until 8 pm.
• Financial Counselling Hunter Valley Project: 02 4933 8999. Covers Newcastle, Port Stephens including Raymond Terrace, Maitland, Dungog, Singleton, Cessnock, Muswellbrook, Scone, Murrurundi and Merriwa.
• Lake Macquarie Financial Counselling: 02 4950 5108, at the Woodrising Neighbourhood Centre, 80 Hayden Brook Road, Woodrising. Open Monday to Thursday, 9 am to 4 pm.

You do not have to see a financial counsellor before asking your lender for help. The banks’ own guideline says they should not require it. But if you have debts with several lenders, or you find these conversations hard, a counsellor is well worth it.

Be wary of paid “debt help”

When rates rise, advertising for debt management firms rises with them. Some charge significant fees for things a financial counsellor or your lender’s hardship team will do for free. Any firm providing debt management services must hold an Australian credit licence that covers it. Check before you sign anything, and start with the free services above.

If Your Lender Says No

First, make a formal complaint to your lender and ask for its internal dispute resolution process. If that does not resolve it, you can take your complaint to the Australian Financial Complaints Authority (AFCA). It is free for consumers, independent, and deals with hardship disputes. Call AFCA on 1800 931 678 (weekdays, 8 am to 6 pm Sydney time) or visit afca.org.au.

Where a Broker Fits In

I am not a financial counsellor, and I will not pretend a new loan fixes every problem. What I can do is look at your whole position: your rate, your structure, your other debts, and whether a better deal is realistically available to you. Often that turns up a real saving. Sometimes the honest answer is that your existing lender’s hardship team, or a financial counsellor, is the right next step. When that is the case, I will tell you, and point you to the right people.

Either way, the conversation is free, and having it now, while you still have choices, is the single best thing you can do.

Frequently Asked Questions

Talk to Someone Before It Gets Harder

If today’s rise has you doing the sums and not liking the answer, you do not have to work it out alone. A short conversation can show you what is possible, whether that is a sharper rate, a better structure, or the right people to call.

Want to talk it through confidentially? Call David on 0417 676 191 or get in touch via our contact form.

This article is general information only and does not take into account your objectives, financial situation or needs. It is not financial counselling or legal advice. Figures are current as at the date of publication. Please seek advice specific to your circumstances before acting.

Sources

• Reserve Bank of Australia, Statement by the Monetary Policy Board: Monetary Policy Decision, 29 September 2026.
• Savings.com.au, Cash rate hits 4.60% after fourth RBA hike of 2026, quoting Cameron Kusher, Herron Todd White.
• Roy Morgan, Mortgage stress risk, July 2026, released 1 September 2026.
• ASIC, FAQs: Dealing with consumers and credit (hardship notices under section 72 of the National Credit Code).
• ASIC, 25-165MR: NAB and AFSH penalised $15.5 million for failing customers facing financial hardship.
• Australian Banking Association, Industry guideline: Banks’ financial difficulty programs, 1 July 2025.
• CreditSmart, Financial hardship and your credit report.
• Moneysmart, Problems paying your mortgage.
• National Debt Helpline, ndh.org.au; Financial Counselling Hunter Valley Project, fchv.org.au; Lake Macquarie City Council community directory.
• Australian Financial Complaints Authority, afca.org.au.