Banks defer 100,000 loans in last week alone

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on May 08, 2020
Banks defer 100,000 loans in last week alone

Photo by Nathan Hurst on Unsplash

Banks have deferred an extra 100,000 loans, including 50,000 home loans, in just the last week to help customers through the COVID-19 pandemic.

New figures from the Australian Banking Association (ABA) show a total of 643,000 loans have now been deferred, with the total values of these loans now over $200 billion. 

ABA Chief Executive Anna Bligh said the figures revealed the economic fallout from coronavirus was still unfolding, and continued support from banks was needed. 

“New data released today shows that in just one week an extra 100,000 customers have had their loans deferred, including 50,000 home loans, to take the pressure off household and business budgets as they navigate through this pandemic,” Ms Bligh said.

“These updated figures, together with figures not previously reported, bring the total number of loans deferred by Australia’s banks as a result of the COVID-19 pandemic to over 643,000, of which approximately 392,000 are home loans.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEES

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEES

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 17, 2022. View disclaimer.



According to Ms Bligh, the total value of loans deferred increased by at least $20 billion in just one week.

“These new figures, released today, shows banks working overtime to ensure assistance is given where needed to customers who are affected by this crisis," she said. 

“The surge in demand for assistance from banks shows that the economic impacts continue to be felt, and by no means is the nation through this crisis."

Putting home loan repayments on hold could free up an extra $1,834 per month for a borrower with a $400,000 mortgage, according to NAB. 

But while the deferral of loan repayments has been welcome relief to many experiencing financial hardship, deferring repayments could cost borrowers more in the long run.

That's because while repayments are deferred, interest is still accruing on the loan balance, increasing the length of the loan and potentially costing tens of thousands of dollars.

CBA approves half a billion in SME loans 

Commonwealth Bank (CBA) has approved more than $555 million in loans for small and medium-sized businesses (SMEs) through the Government-backed SME Guarantee Loan Scheme. 

The scheme, launched in late March, aimed to provide SMEs with quick and easy access to funds to help get through the economic hibernation brought on by the coronavirus.

CBA Group Executive Business Banking, Mike Vacy-Lyle said the bank has helped more than 6,500 customers whose businesses have been impacted by the pandemic. 

“Getting funds quickly to our customers means they have the cash flow they need to pay for critical expenses like wages, supplier payments and other overheads," Mr Vacy-Lyle said.

“We are doing all we can to help. The sheer demand we are seeing means our teams are working around the clock to help as many customers as possible and our priority right now is to get funds into accounts as quickly as we can."

Of the $555 million in loans approved, 42% were for New South Wales, followed by Victoria (27%) and Queensland (16%). 

Almost one in five businesses were in retail trade (18%), followed by construction (16%), accomodation, cafes and restaurants (14%), and business services (12%). 


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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