BOQ reports an 80% fall in mortgage deferrals

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on December 08, 2020
BOQ reports an 80% fall in mortgage deferrals

One of Australia's largest banks, Bank of Queensland, has reported that just 3% of its total loan book is now in deferral.

Ahead of its Annual General Meeting today, Bank of Queensland (BOQ) reported that as of 30 November 2020, it had just 2,500 housing loans remaining in deferral with balances of $889m. 

Managing Director and CEO George Frazis said it was "pleasing" to see the majority of customers begin resuming repayments, as requested by the nation's banks if it was possible to do so. 

"We will continue to work with the remaining 3% of customers still accessing our banking relief packages to support them in their recovery,” Mr Frazis said.

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.

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100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
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NSW/VIC/SA METRO & INNER REGIONAL AREAS
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NO ONGOING FEESFREE REDRAW FACILITY
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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of June 26, 2022. View disclaimer.

That represents a total fall of 80% from the $4.5 billion recorded in June 2020, and is also under par compared to the industry average. 

Data released last month from the prudential regulator APRA also revealed that all banks in Australia combined had $68.2 billion worth of housing loans in deferral, which is 3.9% of all mortgages. 

This is a far cry from previous highs at the height of the pandemic: In late June, that same APRA data showed 11% of home loans were in deferral, to the value of $195 billion. 

APRAnov

Source: APRA deferral data, October 2020

"Exits from deferral continued to outweigh new entries for the fourth straight month in October, with $100 billion in loans expiring or exiting deferral and $12 billion entering or being extended," APRA commented. 

"The total value of loans subject to deferral more than halved over the month to October, with the pace of exits increasing significantly."

Borrowers with 90%-or-greater LVRs continue to be over-represented, however, making up 10% of deferrals despite being just 6% of the total loan book. 

Borrowers on JobKeeper or JobSeeker also continue to be at-risk. 

Data released via SQM Research's Housing Boom and Bust Report 2021 found these ongoing support measures are critical for the ongoing housing recovery. 

BOQnov

BOQ's deferral numbers have plummeted since June. Source: BOQ. 

New mortgage lending sees strong September quarter 

APRA's latest quarterly ADI statistics for the September 2020 quarter revealed strong growth in mortgage lending compared to 2019. 

The data shows that from the September 2019 quarter to the same quarter this year, new loans for owner-occupiers increased by 22.2%, while:

Over the 12 months though, only owner-occupied lending saw growth, rising by 6.4% to more than $1.15 trillion in total.

Otherwise:

  • Investment lending fell by 1.3% to $608 billion;
  • Interest-only loans fell by 22% to $275 billion; 
  • LVR >95 loans fell by 10% to $19 billion

Photo by Jakob Owens on Unsplash

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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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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