1 in 10 mortgages temporarily deferred

By

August 06 2020
Share

The financial impact of COVID-19 has been revealed, as one in 10 mortgage-holders has deferred payments during the pandemic.

Stats released by APRA showed that as at 30 June, data submitted by all ADIs indicates that $274 billion worth of loans have been granted temporary repayment deferrals, which is close to 10 per cent of total loans outstanding.

The figures showed that 9 per cent of households or 496,606 houses had deferred on their mortgage repayments valued at $195 billion, compared with the total value of home loans at $1.8 trillion.

Housing loans make up the majority of total loans granted repayment deferrals, although small-business loans have a higher incidence of repayment deferral, with 17 per cent of small-business loans subject to repayment deferral, compared with 11 per cent of housing loans.

Canstar’s finance expert, Steve Mickenbecker, explained that it is both good and bad news, with it being bad for the 9 per cent who are under financial stress, but a positive that the overwhelming majority of homes did not need the bank’s support.

“The even better news is that $18 billion of home loans came out of pause during June. A surprisingly early return to normality. Let’s hope that Victoria’s July slide back into COVID hasn’t reversed this,” Mr Mickenbecker noted.

Canstar’s recent survey revealed that 46 per cent of home loan borrowers have had their income cut or employment status changed due to the COVID-19 pandemic, but the majority have not at this stage requested a formal loan deferral. Those borrowers covering the shortfall with redraw or offset balances will be hoping for early economic recovery.

The finance expert also pointed out that businesses are currently doing it tougher than households.

“With 17 per cent of loans temporarily deferred, small business is doing it tougher than households, and the necessity of the further JobKeeper breathing space is confirmed.”

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

Most read

Age Pension increase prompts Australians to review their finances

Latest Podcast

Twice the demand: the case study behind Melbourne’s first‑home buyer surge

Resources

There is $17.5 billion in lost and unclaimed super across ...

Borrow