As the March deadline for mortgage deferrals approaches, banks across the country are beginning to stop applications for new freezes on mortgage repayments.
Some of Australia's major banks have said they will stop accepting new applications for deferrals.
NAB, which has deferred repayments on more than 110,000 home loans since March 2020, said today (20 January) is the last day new deferrals will be granted, to allow for two-month deferrals finishing at the end of March this year as mandated by APRA.
Only 7,000 NAB customers are still on paused repayments.
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“While it is pleasing to see most of our customers have resumed repayments we know some customers will need our ongoing assistance," NAB Personal Banking Group Executive Rachel Slade said.
"We will continue to provide support to these customers based on their individual circumstances, such as through reduced loan repayments, payment moratoriums, employment support, including resume and interview skills, and access to financial councillors.
“We ask any customers who are struggling financially to contact us as soon as possible so we can help them get to the other side in the best position possible.”
Other major banks - ANZ, CBA and Westpac - didn't provide specific details on what date they'll stop accepting new deferrals, but in comments provided by bank spokespeople to Savings.com.au, the common theme was that:
- Most customers are already making regular repayments again, and
- Help will still be available to those who need it on a case-by-case basis
"While ANZ has been supporting our customers through this period of uncertainty, regulators have made it clear that mortgage deferrals will cease at the end of March."
"We continue to accept requests from customers experiencing financial difficulty and work with them to understand their circumstances and propose options best suited to their individual position.
"There are a number of options for those who are still experiencing difficulty, whether COVID-related or not. These include restructuring their lending to reduce repayments, partial payments or short-term repayment pauses.
"When entering into payment arrangements with customers we seek to make sure they are sustainable and realistic."
"We have moved to the next phase of support for customer recovery. This includes contacting all home loan customers as they approach the end of their temporary loan repayment deferral periods to discuss their individual circumstances."
"We know that there will be some customers who are unable to make their repayments at the end of their deferral and we have a range of options, including switching to interest only repayments, available for customers alongside our existing range of customer hardship solutions."
"Westpac has assisted more than 145,000 mortgage customers with home loan deferrals since the start of the COVID-19 pandemic and approximately three quarters have re-commenced repayments."
"Customers with ongoing financial challenges will receive tailored support on a case-by-case basis. We look at a range of options as part of this process, such as providing more time to get back to regular repayments.
"Customers experiencing financial difficulty can access personalised support through our dedicated hardship assistance team."
Majority of deferred mortgage borrowers resume repayments ahead of March deadline
Initially set to run for six-months from March to September 2020, Australia's banks and the Australian Banking Association (ABA) announced a further extension on COVID mortgage deferrals, ending 31 March 2021.
This extension was supposed to be granted to customers who were still struggling to begin their repayments, while those who could do so were encouraged to start repaying their loans.
And start repaying they did: In late June 11% of all home loans ($195 billion) had deferred repayments, but as of the end of November, only $49.5 billion (2.8% of all housing loans) still had temporary repayments.
Seek help if needed
Speaking to ABC NewsRadio today, ABA CEO Anna Bligh said there are still plenty of people who are still in difficulty.
"I’m very pleased to say that we’ve now seen almost 90% of those people, the 900,000 Australians who deferred their loan repayments, are now back making those payments," Ms Bligh said.
"There are still some people whose deferrals have not yet reached the end date and banks are working with them individually.
"But what we are seeing is a much smaller group of people in very difficult circumstances than banks had anticipated we would be seeing at this point in the COVID experience."
For those who are still in difficulty, Ms Bligh said the best thing to do is to speak to the bank.
"There are tools that banks have in their toolkit to help people who took a deferral and are still not able to move back to full payments and that they’re working individually with those customers," she said.
"The best thing for the customer, though, is not to be on deferral for so long that they start to lose equity in their most valuable asset."