CommBank, NAB & Westpac among banks offering mortgage repayment deferral extensions

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on July 08, 2020
CommBank, NAB & Westpac among banks offering mortgage repayment deferral extensions

Photo by Scancode Productions on Unsplash

Australians still experiencing financial hardship due to COVID-19 have been offered a further lifeline by their lenders.

A deferral extension of up to four months will be offered to some banking customers on a case by case basis. 

However, borrowers will be urged to return to full repayments as quickly as possible. 

Australian Banking Association (ABA) chief executive Anna Bligh said in the long run it was better for the financial wellbeing of individuals, families and businesses to return to full loan repayments. 

“Those who are able to repay their loans will resume doing so, which is in the best interests of those customers and allows support to be directed to those who need it," Ms Bligh said.

"Encouragingly, many customers have already chosen to resume making repayments.”

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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • 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
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

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 May 25, 2022. View disclaimer.

Customers with reduced incomes and ongoing financial difficulty due to COVID-19 will be contacted as they approach the end of their deferral period, to ensure that wherever possible they can return to repayments through a restructure or variation to their loan.

The ABA said banks will work with customers to find the best options to restructure or vary their loan. Options may include:

  • Extending the length of the loan
  • Converting to interest-only payments for a period of time
  • Consolidating debt
  • A combination of these and other measures.

Around 800,000 Australians have deferred their repayments since the start of the pandemic, totalling $260 billion in home loans. 

Economists and industry figures had raised concerns the country is approaching a 'fiscal cliff' when repayment holidays end at the same time as JobKeeper and JobSeeker at the end of September. 

NAB chief executive Ross McEwan said it had already been checking in with customers to understand their circumstances and help them accordingly. 

“While a significant portion of businesses and homeowners that we have spoken to have started their repayments again, there are clearly still many customers who may need support for a bit longer," Mr McEwan said.

“Bankers will speak with customers about their individual circumstances and the options appropriate for them which may include loan restructure, determining alternative fund sources, hardship assistance or further deferral for up to four months." 

Westpac acting chief financial officer Gary Thursby said it would support customers where needed, but urged them to restart repayments where possible. 

“For customers who remain under stress but can still contribute towards their loan repayments, we will provide support where we can help work through options that may be available to adjust their loan," Mr Thursby said. 

“However, we anticipate that a significant number of customers will be able to resume regular repayments when their deferral term ends.

"We expect these customers to start their repayments again and we would encourage as many people as possible to do so,”

Commonwealth Bank chief executive Matt Comyn said it was committed to providing support to customers and businesses to help them get back on their feet and inject vital financial stimulus into the economy.

“To date, our coronavirus measures since March 2020 have provided about $15 billion in direct financial support to customers and stimulus for the economy," Mr Comyn said.

"Supporting customers who continue to experience financial difficulty is a priority and we are tailoring our support to make sure each customer gets the advice and assistance that suits them."

The Australian Prudential Regulation Authority (APRA) contacted the banks this week to advise them the approach to not treat the repayment deferral period as a period of arrears could be extended up to 31 March 2021.

APRA Chair Wayne Byers said it was fortunate the sector had the resources to continue to support borrowers experiencing financial hardship. 

“These measures are designed to incentivise ADIs [Authorised Deposit Institutions] to continue to support their customers through an extended period of uncertainty, while at the same time facilitating the restructure of eligible loans in a measured and timely manner," Mr Byers said.


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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