Interesting and stressful times indeed! The world has not seen a calamity of this scale and reach since the World War II. I trust all of you out there are coping as best as can be expected in the circumstances and all are in good health.
I’ve received a large number of enquiries about mortgage holidays and around the support available for self-employed and small businesses, so I hope you find this article helpful.
The Government has announced six month mortgage holidays and the Big four banks have released details on how they are going to go about it as yet.
All of them are offering Six months Deferred Payments. However the interest on your loan will continue to accrue. After 6 months the Deferred Principal and Interest would be added to the loan and repayments would increase. The term of the loan is not getting extended.
If you are considering a mortgage holiday please remember that both the Principal & Interest that was due to be paid during the mortgage holiday is added onto the mortgage, so your mortgage balance is going to be larger at the end of the mortgage holiday, and that is going to incur even more interest and take even longer to pay off. While a mortgage holiday is a means to an end, it generally proves to be an expensive option for borrowers. If you can avoid going on a mortgage holiday then please consider digging deep and continue to pay your mortgage if you can.
If you can’t afford to pay your mortgage, or it will cause unnecessary hardship, then by all means take up a mortgage holiday for the full six months. The intention would be to resume your mortgage payments at the earliest possible opportunity, but if you can’t, then you have the full six month mortgage holiday up your sleeve to remove any unnecessary financial pressure.
For those who have insurance, please check your insurance policy. You may be eligible for a claim if you’ve got Mortgage Protection, Income Protection or Redundancy cover. Talk to your insurer. Though the COVID-19 pandemic is an unforeseen event most insurers in New Zealand are taking an empathetic approach to claims.
If you are a landlord talk to your tenant to check if they are affected and if they are ask them to apply for support that has been announced by the government for tenants. The website is www.covid19.govt.nz. If you have a mortgage on your rental property talk to your bank to find out the options available to you. Also talk to your Insurance provider to see if you could claim for loss of rent due inability of tenant to pay.
If you are a tenant who’s affected by the shutdown then talk to your landlord to update them about your situation. Many landlords are offering a temporary rent reduction to help tenants manage.
If you are a small business owner the government has announced wage subsidy packages to help
Please read this article which clearly mentions the entitlements https://www.msn.com/en-nz/money/news/what-youre-entitled-to-under-the-covid-19-wage-subsidy-scheme/ar-BB11Ls2r?ocid=spartanntp .
For those on part time work and having multiple jobs the above article also provides some clarity.
Businesses availing the benefits, they must ensure at least 80% is paid to the employees and that the employees are kept in their jobs for the duration of the subsidy (https://www.beehive.govt.nz/release/covid-19-further-steps-protect-new-zealanders’-jobs)
The whole approach of government is based on trust and honesty and in seeking these assistance one must observe this understanding. Remember when things get back to normal you can be audited as you have a signed a legal declaration at the time of availing the subsidy.
The government has earmarked $27 million to be disbursed by MSD to community organisations and NGOs . Info on this is available at https://www.beehive.govt.nz/release/27-million-ngos-and-community-groups-continue-providing-essential-services). Although criteria for NGOs to apply for this is not clear at this stage, it is likely to be those organizations that have MSD accreditation.
Essentially it is to:
· ensure people have access to food and goods
· place to live
· support the disabled and well being
· keeping families safe
As always anyone who needs help and support can approach Work and Income Assistance.Details can be found here:(https://www.msd.govt.nz/documents/about-msd-and-our-work/newsroom/factsheets/covid-19/help-with-essential-costs-flyer.pdf
If anyone has any concerns, or you would like some help, just reach out to me on 0210327466 or email me on email@example.com for a chat.
Take good care of near and dear ones and use this forced down time to do the family stuff you always keep postponing.