Mortgage arrears are generally viewed more seriously than an ordinary consumer default, you’ve missed payments on a home loan, which is directly relevant to a new home-loan application. That said, the same recency/severity/current-conduct pattern that applies to other credit events applies here too.
Why this event type gets closer attention
Mainstream lenders generally have the tightest tolerance for recent or serious mortgage arrears, it speaks directly to the exact kind of repayment behaviour a new home loan depends on. The type and severity of the arrears (a short, isolated period versus a longer or repeated pattern) changes which policies are worth checking.
What tends to matter
- How long ago the arrears occurred, and how long they lasted
- Whether there was a specific, explainable life event behind it (job loss, illness, separation) versus an ongoing pattern
- Whether your current mortgage (if you still hold the property) or subsequent accounts have been conducted cleanly since
- The resulting LVR you’re now seeking
Near-prime and specialist pathways
Some specialist products can consider mortgage arrears history subject to event age, current conduct and LVR, again with a real trade-off in pricing, fees and terms compared with a mainstream product. Broader tolerance still requires a workable, current position, not just an old explanation.
What to prepare
- A recent credit report
- Current statements showing your recent, clean conduct
- A clear, honest explanation of what caused the arrears and what’s changed since
Next step: see the Scenario Lens‘s Credit History tab, then talk with KartikKumar directly, this is exactly the kind of scenario worth a real conversation rather than a generic online answer.