“10 Things That Let Your Bank Call In the Loan Even If You Have Never Missed a Repayment”

Most people think a home loan is simple. Pay on time and the bank leaves you alone.

In Victoria it is very different.

A mortgage is not just a repayment agreement. It is a full security arrangement under the Transfer of Land Act 1958 (Vic) with a wide set of ongoing duties that last for the entire life of the loan. You can have a spotless repayment history and still fall into default without realising it.

Here are ten things that allow the bank to call in the loan even when you have never missed a single payment.

1. Renovating without permission

If you put an extension on the house, knock down walls, add rooms or change the layout without getting written approval, you have breached the mortgage conditions. Anything that changes the security value is something the bank wants to approve first.

2. Demolishing the dwelling

Removing the house without the lender’s consent is one of the fastest ways to fall into default. The land alone will not match the value used when the loan was approved.

3. Letting the insurance lapse

Every Victorian mortgage requires full replacement insurance with the bank noted on the policy. If the policy expires or you forget to list the bank, that alone can trigger action. These duties sit behind the bank’s registered interest under the Act.

4. Not telling the bank about major damage

Bushfire, flood, storm, vandalism or anything that materially affects the property must be reported promptly. The bank needs to understand the condition of the security and may need to be involved in any insurance claim.

5. Allowing illegal activity at the property

This one surprises most borrowers.

If a tenant, relative or occupier uses the property for unlawful activity, the bank can treat it as a serious breach. This includes drug labs, cannabis crops, unlawful commercial trading such as illegal vape or tobacco sales, brothel use, storage of stolen goods or any activity that can attract police or council action. Illegal use can also void insurance which makes the risk even higher.

6. Letting the home fall into disrepair

If the property is allowed to deteriorate significantly, you may breach your duty to keep it in reasonable repair. The bank expects the security to be maintained so that the value is not reduced.

7. Doing unsafe or unapproved building works

Works done without permits or in breach of the Building Act 1993 (Vic) or council planning rules put the borrower at risk of enforcement notices. A building notice or order is enough for a lender to take action.

8. Not paying council rates, water charges or owners corporation fees

Even if you pay the loan every month, unpaid rates or owners corporation fees can still put you in default. These create statutory charges under the Local Government Act 1989 (Vic) and they can outrank the bank’s mortgage, which the lender will not accept.

9. Changing the use of the property without consent

Turning your home into short stay accommodation, a workshop or a commercial space without permission alters the risk the bank agreed to. Banks lent money based on a particular use of the land.

10. Allowing another interest on the title

Letting someone lodge a caveat, granting long leases, creating easements or giving anyone rights that affect the title will compromise the bank’s priority. This alone can justify the bank calling in the loan.

You can be fully paid up and still lose the house

If any of these things occur, the bank can demand the breach be fixed, reassess the loan or in serious cases call the loan in and exercise their power of sale under the Transfer of Land Act 1958 (Vic).

Repayments are only one part of a Victorian mortgage. The security obligations sit quietly in the background and are just as important.

If you have questions about your mortgage duties or you are worried that one of these issues may apply to you, get in touch. Victorian Property Settlements is here to help guide you through it.

Victorian Property Settlements – Trusted for over 25 years by Victorian buyers and sellers.
Visit: www.victorianpropertysettlements.com.au

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Did you know your bank can call in your home loan even if you have never missed a payment?

Most Victorian borrowers have no idea these ten things can put them in default straight away. Renovations without consent, expired insurance, illegal activity by a tenant, unpaid rates and even unapproved building works can all let the bank take action.

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LINKEDIN POST FOR AGENTS

Many buyers and sellers think that keeping up with repayments is enough to protect them from lender action. In Victoria that is only one part of the picture.

Under the Transfer of Land Act 1958 and standard mortgage terms, a borrower can fall into default without missing a single repayment. Unapproved renovations, expired insurance, illegal use by a tenant, unpaid rates and unsafe building works are just a few of the triggers.

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Full article here: [INSERT ARTICLE LINK]

#conveyancing #MelbourneConveyancing #VictorianPropertySettlements #PropertyMadeEasy #BuyingOrSelling #TrustedConveyancers #HomeJourney