Coronavirus sees $7 billion worth of loan repayments deferred

author-avatar By on May 04, 2020
Coronavirus sees $7 billion worth of loan repayments deferred

Photo by Shi Min Teh on Unsplash

Australians experiencing financial hardship due to COVID-19 have deferred $6.8 billion business, mortgage and other loan repayments.

That's according to data released by the Australian Banking Association (ABA) which showed more than 320,000 homeowners have been approved for a loan deferral on their mortgage repayments. 

An additional 170,000 business owners have also received a deferral on their business loan repayments and nearly 37,000 other loan repayments, such as personal loans and credit cards, have also been deferred. 

Meanwhile, cheap loan facilities to assist small and medium-sized businesses have seen more than $45 billion in new loans and a further $6 billion has been loaned through increases to existing loans and credit facilities. 

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
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

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 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. Rates correct as of October 19, 2021. View disclaimer.

ABA CEO Anna Bligh said the decision by banks to defer payments would take some of the pressure off Australians who are doing it tough.

“The actions of banks will help inject much needed investment into the economy, with the deferrals, new lending and increased credit, allowing people and businesses to spend on the things they need," Ms Bligh said.

“The strength of Australia’s banks has allowed the industry to step up and play a key role in helping, not only our customers, but supporting the recovery of the Australian economy, through one of the most challenging periods in our lifetimes.”

$1.3 billion in super withdrawn 

The Australian Prudential Regulation Authority (APRA) has published data regarding withdrawn superannuation due to the financial hardship from COVID-19.

The regulator found there were over 650,000 applications for early release, with more than 150,000 processed, paying members a total of $1.3 billion, with an average benefit paid of $8,002

For applications paid in the first week of the scheme, trustees took an average of 1.6 days to make payments to eligible members after receipt of their applications from the ATO. 

APRA Deputy Chair Helen Rowell said the statistics ensured compliance and provided valuable insight into members' behaviour. 

"This new data collection enables APRA, Government and other stakeholders to monitor the take-up of the new scheme, and ensure trustees are processing eligible applications in a timely manner," Ms Rowell said. 

"Under the Superannuation Industry (Supervision) Act 1993, trustees are legally required to make early release payments to eligible members ‘as soon as practicable’.

"We expect trustees should generally be able to achieve this within five business days, however we recognise this may not be practicable in all cases, as trustees conduct fraud checks, and fulfil their legal obligation to look out for the best interests of all fund members.

“APRA is closely monitoring trustee performance in this area and will consider taking appropriate action if evidence emerges of funds not releasing benefits to eligible members as soon as practicable." 
 


Disclaimers

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): Great Southern Bank, 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.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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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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