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Banks call customers as mortgage deferral period ends
A small but growing number of borrowers who have put their mortgage or business loan on hold during the COVID-19 pandemic are beginning to pay their debts as the first six-month deferral period comes to an end, an industry body has said.
Banks call customers as mortgage deferral period ends
A small but growing number of borrowers who have put their mortgage or business loan on hold during the COVID-19 pandemic are beginning to pay their debts as the first six-month deferral period comes to an end, an industry body has said.
According to the Australian Banking Association (ABA), the initial wave of six-month loan payment deferrals is coming to an end, with banks contacting customers to discuss the next stage of support and assistance.
Of the more than 900,000 loans that have been deferred across the pandemic, at least 450,000 loan deferral customers will be assessed in the coming weeks as they approach the end of their deferral in September and October.
In July, 81,000 deferred loans, worth $22.4 billion, resumed repayments.
By the end of July, 109,000 loan deferrals worth $41 billion had resumed repayments (around one in seven of total deferrals).
These include 105,000 business loan deferrals to small and medium-sized businesses, of which 65,000 will be assessed by the end of September, and 40,000 by the end of October; 260,000 mortgages are also due to be assessed, 80,000 by end of September and 180,000 by end of October.
“The loan deferral measure offered to customers by Australia’s banks has led to the largest-ever customer contact process in the industry’s history, with an additional 5,000 new or redeployed staff working to ensure customers understand their options,” ABA CEO Anna Bligh said.
“Customers know what’s best for them. It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision to suit their needs.”
Of the 900,000 loans that have had payments deferred, 13 per cent had already resumed repayments by the end of July. Some banks have estimated that an additional 100,000 people began resuming payments in the month of August.
“As customers who are able to begin their repayments again, it allows banks to focus their support on those who really need it,” Ms Bligh said.
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