Debt restructuring
Debt restructuring: what to check before changing your home loan
A practical guide to reviewing cash-flow pressure, eligible debts, loan term, total interest, fees, home-loan risk, and safeguards before restructuring debt.
Key checks before you decide
Reviewed by emoney broker team. Updated 12 July 2026. Sources are listed below.
- List the event or pattern that created the repayment pressure.
- Separate temporary costs from ongoing spending commitments.
- Work out what must change so new unsecured balances do not rebuild.
- Compare the proposed repayment on more than one loan term.
In this guide5 sections
Start with the cash-flow problem
Debt restructuringRefinance / Review goalsRestructure debtCompare repayment relief with long-term interest cost, behaviour risk, and lender policy before restructuring debt.Open page is most useful when the review explains the underlying cash-flow problem, why current repayments are difficult, and what would make the new position sustainable.
Credit-card, car-loan, personal-loan, tax, and home-loan commitments can create several repayment dates and high monthly pressure. Moving eligible debts into a different structure may reduce that pressure in some situations, but it does not remove the need to understand how the balances built up.
The review should separate a temporary shock—such as illness, reduced hours, separation, or a one-off expense—from a recurring gap between income and spending. That distinction affects whether refinancing, budgeting changes, lender hardship support, or another pathway deserves attention first.
- List the event or pattern that created the repayment pressure.
- Separate temporary costs from ongoing spending commitments.
- Work out what must change so new unsecured balances do not rebuild.
Watch out
Compare total cost, not only the monthly repayment
A lower repayment can come from a lower rate, a longer term, or both. Extending a short-term debt across a home-loan term can increase the total interest paid even when the monthly number falls.
Use the same debt amounts and realistic repayment assumptions when comparing the current position with a proposed structure. Include application, valuation, discharge, package, government, and advice-related costs where they apply.
Ask for the repayment, remaining term, estimated total interest, and break-even point. The comparison should also explain which debts would be paid out and whether any credit limits would remain available afterwards.
- Compare the proposed repayment on more than one loan term.
- Include fees and switching costs.
- Check the total interest estimate, not only the first-month saving.
- Understand which debts become secured against the home.
Prepare the complete debt picture
A useful broker review needs the balances, limits, rates, repayments, and recent conduct for every debt being considered, together with the current home-loan position.
Include credit cards even when the balance is low, because the full limit can affect lender assessment. Include car loans, personal loans, buy now pay later facilities, tax debts, and any repayment arrangements that need context.
For the home loan, prepare the balance, rate, repayment, remaining term, property value estimate, and any fixed-rate or interest-onlyHome Loans / Loan decisionsPrincipal and interest vs interest-onlyUnderstand repayment-type trade-offs before choosing an interest-only or principal-and-interest structure.Open page expiry. Do not send account numbers or sensitive statements through an unapproved channel.
- Balance, limit, rate, repayment, and remaining term for each debt.
- Recent repayment history and any missed or arranged payments.
- Current home-loan details and a realistic property value estimate.
- Income, regular expenses, and the amount of monthly pressure to solve.
Broker note
Build safeguards into the new structure
The post-restructure plan matters as much as the refinance itself. Without clear safeguards, repaid credit cards or new car and personal loans can recreate the same pressure alongside a larger home loan.
Discuss whether repaid credit facilities should be closed or limits reduced, how an emergency buffer will be rebuilt, and what spending or repayment system will be used. The aim is not judgement; it is to make the improved cash flow durable.
Set a review date after settlement. Check that old debts were closed as intended, direct debits changed correctly, the first home-loan repayment is understood, and extra repayment or offsetHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page plans are working.
- Decide what happens to repaid credit facilities.
- Create a realistic emergency buffer target.
- Avoid taking on a new car loan, personal loan, or credit-card balance without checking the cash-flow impact.
- Book a post-settlement and annual loan review.
Next step
Want a broker to check this against your situation?
Answer a few questions so emoney can route your enquiry to the right broker conversation.Ask an emoney broker to review the repayment structure and trade-offs.Watch out
Act early when repayments are already urgent
If repayments are overdue or the household cannot meet essential costs, contact the current lender's hardship team early rather than waiting for a refinance outcome.
A refinance is not guaranteed and lender assessment can take time. Hardship support may be the more immediate conversation when repayments are already behind, enforcement action is possible, or the borrower is choosing between debt repayments and essential living costs.
A licensed broker can provide home-loan guidance, but legal, tax, financial-counselling, or insolvency questions may need the appropriate specialist.
- Contact the lender early if a repayment may be missed.
- Keep records of hardship requests and agreed arrangements.
- Use an appropriate financial counsellor or specialist when the issue extends beyond home-loan structure.
Calculator next step
Home loan repayment calculator
Test whether a loan amount, rate, term, and repayment type feel workable before taking the numbers further.
- Best for
- Checking repayment comfort across purchase, refinance, or rate-change scenarios.
- What it calculates
- Weekly, fortnightly, or monthly repayments from loan amount, rate, term, frequency, and repayment type.
A broker still needs to check fees, comparison rates, offset or redraw settings, loan structure, and policy fit.
Open RepaymentsSources used
- ASIC MoneySmart home loans
ASIC MoneySmartofficial sourceChecked 5 July 2026
- ASIC MoneySmart switching home loans
ASIC MoneySmartofficial sourceChecked 5 July 2026
- ASIC MoneySmart using a mortgage broker
ASIC MoneySmartofficial sourceChecked 5 July 2026
- ASIC responsible lending obligations
ASICofficial sourceChecked 5 July 2026
This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.
Next step
Want a broker to check what applies to you?
Use Quick Check to share the goal, timing, and loan context so emoney can route the conversation.
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