Loan deferrals trend downwards

By Grace Ormsby

October 06 2020
Share

Loan deferral numbers are dipping at one of Australia’s biggest banks, pointing to the improved financial position of many Australians who were initially heavily affected by the pandemic.

The Commonwealth Bank of Australia (CBA) has noted that the total number of loan deferrals it has accepted has trended downwards since June, when it reported 210,000 deferrals.

This number dropped to 182,000 in July, and was sitting at 174,000 as at 31 August 2020.

Coinciding with the decrease was a drop in the monetary balances being deferred, which now sits at $59 billion after reaching $67 billion in deferred loan amounts back in June.

According to CBA, home loan customers who have deferred their mortgage repayments due to financial hardship now comprise of 7.4 per cent of the bank’s home loan portfolio – down from 7.6 per cent in July and 8.2 per cent across June.

Of those individuals affected, their deferred balances make up a slightly higher portion of loan balances – at 9.8 per cent at the end of August, down from 10.1 per cent in July and 10.8 per cent in June.

Interestingly, investment property mortgage loans make up almost one-third of all home loan deferrals still in place – at 32.6 per cent.

A further 14.6 per cent are interest-only loans, while 13.5 per cent have an LVR greater than 90 per cent.

As the end of the initial deferral period draws near, many loan deferrers will be able to recommence their payments, according to CBA CEO Matt Comyn.

“We have been contacting all customers with deferred loans to talk with them about their options, including returning to full or partial payment, or converting their loans to interest only,” he said.

“For customers who are facing financial hardship, we are reaching out to offer solutions tailored to their individual needs.”

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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

Superannuation guarantee rate rises to 12 per cent as parental leave changes ...

Resources

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

Borrow