Australians affected by the devastating bushfires may soon receive some welcome financial relief.
Westpac customers whose homes have been destroyed won't have mortgage repayments to worry about, with the big four bank pledging to cover repayments for one year, up to a limit of $1,200 a month.
It's part of the bank's bushfire recovery support package which will also see customers offered interest-free loans to cover the gap between insurance payouts and rebuilding costs.
Westpac acting chief executive Peter King said the bank was committed to helping customers and the community recover from the ongoing crisis.
"These initiatives are designed to provide practical, on the ground support for our customers, our people and for those who are caring for affected communities," Mr King said.
"In times of such unprecedented devastation, we want customers and communities to know we're here to help alleviate financial concerns so they can rebuild their lives, homes and businesses."
The support package also includes $250 million in interest-free home loans to help customers rebuild their homes. Customers whose homes have been damaged or destroyed can go into their local Westpac branch and pick up $2,000 in emergency cash.
Other major lenders, including the big four banks, have all announced a range of relief measures for borrowers whose homes have been damaged or destroyed in the fires. Each of the big four banks have pledged at least $1 million in bushfire donation packages.
NAB will suspend home and personal loan repayments, and has pledged $5 million for bushfire recovery efforts.
ANZ's assistance includes suspending repayments on loans, including credit cards, for up to three months, as well as temporary interest rate relief for customers experiencing "extreme financial distress".
Online lender loans.com.au is donating $2,000 to each customer who has lost their home and will provide a break from mortgage repayments.
"We are in close contact with our customers who have lost their homes, and are working through different processes, including our hardship procedures to give them a break from their mortgage repayments. At the moment we are aware of three customers who have lost their homes due to the bushfires," loans.com.au managing director Marie Mortimer said.
The table below displays a selection of variable-rate home loans on offer, featuring a low-rate pick from each of the following three categories: the big four banks, the top 10 customer-owned banks, and the larger non-banks.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) owner-occupied home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Government pledges extra $50 million
The Morrison government, which has been heavily criticised for its handling of the bushfire crisis, has announced an extra $50 million for the charity sector to help those affected.
The assistance package will be used for food vouchers, support services and financial assistance to be administered by charities and made "immediately available" to those who need it most.
Australian Council of Social Service CEO Cassandra Goldie welcomed the funding, but said more will need to be done in the long term.
"This funding supports frontline community services to urgently get emergency funds to people impacted for immediate needs," she said.
"We continue to call on the government to increase its Disaster Relief Payment, which at $1,000 per person has not been increased in 14 years, and the Disaster Recovery Allowance, set at the same rate as Newstart - $40 a day, which is not enough for anyone to get by. The ongoing impact of the bushfire crisis is set to include rising food prices, which will make trying to get by on Newstart even more unbearable.
"We're also calling on the Government to work with people impacted by bushfires who were unable to afford insurance and to establish a review into affordable insurance for people on low incomes. As extreme weather events increase in Australia due to climate change, insurance premiums are escalating and too many people, particularly people on low incomes, find themselves under-insured or not insured."
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
- RBA says no to Christmas cash rate cut
- JobSeeker recipients spending up to 69% of their income on rent
- Borrowers with smaller deposits more likely to extend their home loan deferral
- Will the RBA change the cash rate in December?
- A brief guide to buying government bonds