The bank has issued a default notice on the mortgage

A default notice is not a repossession. It is the step a lender has to take before it can act, and it names the amount required to remedy the default and a date. If the loan is regulated consumer credit, ASIC says the notice must give 30 days. A loan taken for business purposes sits outside the NCCP Act, so that 30 days is not yours by statute — the period comes from the mortgage and from the property legislation in the state where the land is.

What the notice is, and what it is not

A default notice does three things: it identifies the default, it says what has to be done to remedy it, and it gives a date. It is not a court order, it is not possession, and it is not the end of anything. Until the date passes the lender's power of sale has not arisen, which means everything that happens before that date is cheaper than everything that happens after it — each later stage adds costs to the balance you owe.

The number of days is where most of the confusion lives, and it depends on something that has nothing to do with the property. If the loan is regulated consumer credit, ASIC's Moneysmart is clear: the notice has to give 30 days to make up the missed payments plus the regular repayment, and only after that can the lender serve a statement of claim. For regulated credit a lender also has to answer a hardship request in writing within 21 days. But credit taken wholly or predominantly for business purposes is not regulated under the NCCP Act — ASIC's own guidance on when the credit legislation applies says so — and neither of those periods is yours by right.

What sets the period then is the mortgage itself and the property legislation of the state where the land is. In New South Wales, section 57 of the Real Property Act 1900 requires a written notice on the mortgagor demanding the default be remedied and warning that the land may be sold, before the power of sale can be exercised. The period that notice has to run is set by that section and can be affected by the mortgage, so the honest answer is that your two documents — the notice and the mortgage — are the only place to read your real deadline. Do not lift a number from an article about a different state: Queensland replaced its entire Property Law Act on 1 August 2025, and a template citing the old one is citing a repealed Act.

One thing worth checking on the notice itself: whether the default is monetary or a breach of a covenant. Missed payments are one problem. A breach of a loan covenant — an unpaid rates notice, a lapsed insurance policy, a valuation condition, a reporting obligation — is often a different and much cheaper one, and it is not unusual for a notice to name both.

You are not the first one this week

Almost everyone rings their own bank first, and the bank is the one institution that cannot help here. It has already formed its view, and a default on the file is now a reason for every other bank to decline as well — not because the loan would not be repaid, but because the last financials look wrong, or a lodgement is late, or the credit file has a mark on it. Those are reasons a bank exists to care about. None of them says anything about whether there is equity in the property.

That gap is where HomeSec has spent since 2004. We are not here to judge how the default happened, and we have seen enough of them that they do not surprise us. What we look at is whether there is enough unused equity in Australian real property and whether the purpose is a genuine business one — from $20,000 to $5,000,000 against that equity. No financial statements, no credit score threshold, no interrogation about the last two years. From a clean, complete scenario funds can be available in as little as 24 hours, and interest can be capitalised for up to six months so nothing is payable while the business recovers.

Back to the notice, because the date on it runs whatever anybody decides about funding.

What the notice does not take away

Losing the argument about the arrears is not the same as losing every protection you have, and two of them are worth knowing now rather than afterwards.

1. 1
   A sale has to be a real sale.In New South Wales the Conveyancing Act 1919 puts a duty on a mortgagee exercising a power of sale to take reasonable care to ensure the land is sold at market value, or for the best price reasonably obtainable in the circumstances, and an agreement that tries to exclude or modify that duty is void. Anything left after the debt and the costs of sale is yours.
2. 2
   Farm land has its own gate.Where farm debt mediation legislation applies, a creditor must invite the farmer in writing to mediate before taking enforcement action on a farm mortgage. In New South Wales the farmer has 20 business days to respond, and enforcement waits on an exemption certificate, which covers that mortgage for three years. This is a real and frequently overlooked protection.
3. 3
   The payout figure is a number you are entitled to ask for.Not the balance on the statement — the figure to discharge the mortgage on a given date, including whatever the lender is adding. Ask for it in writing and ask what it will be in a fortnight, because that is the number any refinance has to clear.

What the notice also does not do is wait. The protections above are remedies after the event. The period before the date is the only part of this you still control.

The first 48 hours

1. 1
   Read the notice for the date and the exact amount.What has to be paid to remedy the default, and by when. Write both on the front page. If the notice is unclear about either, that is a question for a lawyer this week, not next month.
2. 2
   Ask the lender for a payout figure in writing.In writing, with a date, and with a second figure a fortnight out. A refinance cannot be structured against a number nobody will confirm.
3. 3
   Separate the monetary default from any covenant breach.An insurance policy that lapsed or a rates notice that went unpaid can often be fixed in an afternoon, and fixing it narrows the notice to the part that needs money.
4. 4
   If the security is farm land, say so immediately.To the lender, to your lawyer, and to anybody you ask for finance. It changes what the creditor is permitted to do next.
5. 5
   Start the refinance in parallel, not afterwards.Waiting for the existing lender to agree to something is how the date arrives with nothing arranged. A refinance that is already in progress is also the most persuasive thing you can put in front of them.

When refinancing out is the right answer, and when it is not

Refinancing a defaulted mortgage makes sense when there is equity and the business behind the loan works. A bad year, a project that ran long, a client who paid four months late — and trading since has been sound. It makes sense when there is a clear exit: a property under contract, a sale that completes, a bank refinance that will proceed once the default is cleared off the file. Clearing a default is often the only thing standing between a business and ordinary bank funding again.

It does not make sense when the debt is already close to what the property is worth. There is no room to refinance in that position, and paying costs to find out wastes weeks that could have gone into a negotiated sale — which usually raises more than a sale by a lender does. It does not make sense either when the business is losing money every month and the mortgage is simply where that shows up: borrowing more against the same property to cover it is how people lose the property as well as the business. If that is the honest position, the people to speak to are a lawyer and, if a company is involved, a registered liquidator.

This page explains what a default notice is and what the options are. It is general information, not legal or insolvency advice: what applies to your mortgage is a question for a lawyer, and for a company in difficulty a registered liquidator is the person to ask. ASIC's Moneysmart is the primary source on regulated credit, and ASIC's guidance on when the credit legislation applies is the source on which loans are regulated at all.

Reviewed by Paul Stone, Joint Chief Executive